Neo might be the worldâs top âpeople-firstâ investor. Itâs a thesis Ali developed after passing on an early investment backing Max Levchin as he started PayPal (with an entirely different idea), and again when his smartest friend from Harvard joined Google as the third employee (there were dozens of other search engines).
Ali started Neo in 2017 as a network for the top college students after a discussion with Steph Curry. Neo has since invested in the Seed rounds of Cursor and Kalshi (amongst many others), and Ali shares everything heâs learned about spotting outlier talent early, how to hire top talent, why computer science is the best business education, and why the greatest entrepreneurs start young.
Special thanks to Claire Shorall, Aliâs college roommate Alan Shusterman, his cousin Fuzzy Khosrowshahi, and his twin brother Hadi Partovi for their help brainstorming topics for this conversation.
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Timestamps to jump in:
0:09 Neoâs two 10x funds
2:19 Missing PayPal led to starting Neo
9:32 Not investing in Google at 3 employees
11:31 Backing Facebook despite not liking the idea
13:01 Starting Neo to help the top college students
17:21 How to identify outlier talent
24:38 Neoâs coding test
27:41 Bootstrapping the first cohort of Neo Scholars
34:58 How Cognition President Russel Kaplan changed Neo forever
39:21 Starting Neo after talking to Steph Curry
59:38 Is coding still relevant in 2026?
1:03:43 How to hire outlier talent
1:07:25 Why you should aggressively apply for one job
1:11:09 Neo Residency: $750k uncapped
1:19:51 Growing up in Iran during the revolution
1:26:03 How the immigrant mentality impacts you
1:29:15 Most entrepreneurial roots start very young
1:39:18 Lessons investing in Cursor + Kalshi seed rounds
1:50:27 Confession: a podcast about failure
1:52:36 Fucking up a $50m deal by lying to Steve Jobs
Referenced:
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Transcript
Find transcripts of all prior episodes here.
Turner Novak:
Ali, howâs it going? Welcome to the show.
Ali Partovi:
Thank you so much. Great to be here, Turner.
Turner Novak:
Iâm excited youâre here. I just read an article in the Wall Street Journal talking about Neo. I think it said you turned $120-150 million into $1.4 billion. Is that the number I saw?
Ali Partovi:
The headline number wouldâve been $1.2 billion.
Turner Novak:
$1.2 billion. But that was net, and thatâs the end-of-year number. Itâs higher now, because one of the biggest drivers of that is Cursor, which has had a big step up since then.
Ali Partovi:
Yeah. I think there are a couple of others. Kashi was in that one too.
Turner Novak:
No, Kashiâs in our previous fund.
Ali Partovi:
Our first fund and our second fund are both on track to be 10x or more, which is...
Turner Novak:
Thatâs pretty good. Very, very hard to do. Especially two times.
Ali Partovi:
Especially twice. And the second one was a 2021 vintage, which is one of the toughest.
Turner Novak:
Thatâs a brutal vintage. I feel like even hitting 1x DPI on a â21 vintage is going to be like top quartile.
Ali Partovi:
This is true. And this is actually what led to that Wall Street Journal article. Julia Chernova had written a piece about how the 2021 cohort of venture funds are all struggling and barely returning. The 90th percentile is 1.5x. And we were like, âWow, weâre doing many multiples above the 90th percentile.â So we decided to share our numbers with her, which is something we generally donât do publicly, but we wanted to give her an inside look to tell the story. Iâm really glad about how she presented what Neo is.
Iâm much more obsessed, though, about what mistakes weâre at risk of making looking forward. Celebrating returns from 2021 is a nice pat on the back, but I care more about what weâre doing right now to add value.
Turner Novak:
Yeah. And you canât really go back and change 2021 at this point. So, kind of the genesis of Neo. You like to back people based on talent, not necessarily the idea or the market. And thereâs an interesting story there. You didnât invest in PayPal, and this kind of kicked off the whole thesis you have. What happened with Max and PayPal?
Ali Partovi:
Turner, I have so many stories of what an idiot I was before fully appreciating this lesson. Iâll start by saying, as a founder in my early twenties, I realized how important people were. The traditional wisdom for starting a business, if you were building a bookstore or a retail business, was âlocation, location, location.â But I realized for tech, with the internet, there was no location map. Itâs people, people, people. From seeing my own company grow, I realized you could kind of predict the trajectory of a startup just by seeing the first 10 people.
I was obsessed with hiring people smarter than myself. But ironically, I didnât see the obvious extrapolation: the best way to predict who the first 10 people at a startup are is to look at who the first person is.
One of the contractors at Link Exchange (this was right after we sold the company, I was 26, Max was 22) was probably our best engineer, or certainly top three or four. When he came to the office, people spoke in hushed tones. âOh my gosh, itâs Max Chen.â This was a 19 or 20-year-old kid. Heâs brilliant. When he left to start PayPal, which wasnât even called PayPal, it was called Infinity. The business idea was a joke. It couldâve been a great skit for HBOâs Silicon Valley.
Turner Novak:
How bad was it?
Ali Partovi:
Besides myself, Alfred Lin and my co-founder Tony had left to start their own fund. They passed on investing in PayPal. All of us knew Max was a genius, but we all thought the concept was stupid.
It wasnât PayPal yet, it was an app for the Palm Pilot, which was a promising new handheld device at the time. If I owned a Palm Pilot and you owned a Palm Pilot, and weâd both linked our apps to our bank accounts, I could send you money, as long as we were no more than two meters apart with nothing obstructing, because it used the infrared port to zap the money across. It was a cool novelty for nerds.
Turner Novak:
It would be like a cool hackathon project.
Ali Partovi:
Yeah, but nobody even owned a Palm Pilot at the time. There were like four different requirements that all had to be true: Palm Pilot, linked to a bank account, in front of someone, within two meters. The real thing is, Max was and is clearly a genius. The way I thought about investing at 26 was probably how a lot of young VCs think about it, Iâm the smartest person in the room, let me poke holes in this idea. Not a good idea, therefore donât invest.
Turner Novak:
You need a thesis, you need to understand the market, do all this analysis, market sizing, talk to customers.
Ali Partovi:
Yeah. My posture now is, I hope Iâm not the smartest person in this room. I hope this founder, even if theyâre half my age, is an absolute genius. If somebody super smart has gone all in, put their whole life and career on the line, even if itâs a dumb idea, theyâll realize it. They are day and night waking up to work on this thing. If itâs not good, they will change it into something that is good. Smart people donât pursue a dumb path very long before correcting it.
Same timeframe, late â98, early â99. One of my smartest friends from Harvard, Craig Silverstein, became the first employee and CTO of a new startup called Google with his Stanford PhD buddies Larry and Sergey. Craig was, if not the best, top three strongest in the CS department of our class at Harvard. I knew he was a full-on genius. But again, starting a new search engine seemed foolish. If you evaluated it on the business plan, there were already 10 other search engines viciously fighting each other for market share. Yahoo was dominant with around 75%. Then Excite had 13%, and then it dropped to 3%, 1%, nine or ten public companies all at each otherâs throats. A few people coming out of Stanford with a better algorithm didnât sound like a business plan. But it was a team of superstars.
So for me, having not invested in either PayPal or Google, it became really clear that paying too much attention to the business plan can make you miss a superstar team. The right approach is to be about 90% focused on the people.
Then, fast forward a couple of years. My brother Hadi said he had just met this new startup called Facebook.
Turner Novak:
There were a bunch of social networks at the time, right?
Ali Partovi:
Yeah. Facebook at the time was an eight or ten-person company. He described it to me. He was super excited and I was skeptical. It sounds like a frat. The actual house they worked in was a frat, but itâs also an online social club for college students.
Turner Novak:
Maybe something we wish we could be young again and join, but as an investment...
Ali Partovi:
And Hadi said, âAli, youâre thinking about the wrong thing. Forget about the idea, think about the people.â He described meeting Mark, and he said, âI donât think Iâve ever met anyone who reminds me more of Bill Gates, the intensity and the ambition. I donât care what theyâre doing. I want to invest in this team.â
I owe a lot of my own lessons to these mistakes and to my twin brother. Many of my best angel investments came from Hadi. But over the course of a lot of dumb decisions, I kind of reoriented. Neo, which I started in 2017, has stayed true to the exact same belief: you can identify superstars, future tech leaders, when theyâre still in college.
Now, of course, itâs not 100% accurate. Weâre talking about forecasting someoneâs future. But I believe itâs possible to do it, and also to help people maximize their potential through mentoring, connecting them to others, and community building. We intentionally spent thousands of hours on college campuses, taking one-on-ones, giving advice and mentorship, but also looking for the outliers.
Even before I raised the first fund, I started selecting the first class of what we called Neo Scholars. The first class was 30 people, and it included the co-founders of Chai Discovery, Pika...
Turner Novak:
Cognition. One of them, the president of Cognition, is his name Mark?
Ali Partovi:
Thatâs right. And Russell Kaplan, now president of Cognition, was also in that first class.
This draws back to my own experience, where I knew when I was a college student who the smartest kids were.
Turner Novak:
Like the guy you want on your team for the group project.
Ali Partovi:
Exactly. When I graduated, I made a little mailing list of maybe ten people to discuss startups. This was when email was relatively new, right when the web browser had just come out. I had a keen sense of who the most entrepreneurial and technically astute people around me were, whether in my year at Harvard, a year beneath me, or from other schools. The least successful person in that group sold his company for around $100 million. Many people in it were much more successful than me. Dara Khosrowshahi, my second cousin, is now CEO of Uber.
So I realized I clearly have an ability to identify talent. And Neo is very much about trying to double down on that and scale it, to make it an institutional thing, not just Ali Partoviâs personal network. Itâs an institutional brand and community now.
Turner Novak:
Okay. I want to ask you about that, but first, to level set on Neo. Thereâs the Scholar program, which is when youâre in college. Then thereâs the residency, where you get a little more money and spend more dedicated time. Am I remembering this right?
Ali Partovi:
Yeah. The residency is a three-to-four month program with a two-week bootcamp and then shared space. Itâs for both college students who get a grant and for startups who get $750,000 uncapped. Iâd say itâs a hybrid between a Teal Fellowship and an accelerator.
Those are the two programs we have. Besides that, we also just make seed investments, weâll lead rounds in companies that arenât interested in any program. The residency is relatively new. When we invested in companies like Cursor and Kashi, we didnât have these programs yet. The Cursor founders were Neo Scholars since they were sophomores, but they didnât go through our accelerator program.
Turner Novak:
I want to talk about that in a bit, but whatâs most interesting right now is: when you meet someone and youâre trying to figure out how talented they are, how likely are they to go on and build a big startup? What are you thinking about, and whatâs the first thing you ask them?
Ali Partovi:
I start by just asking where they grew up, where were you born, where did you grow up, trying to learn their story. Iâm not looking for some template to match them against. I just want to learn who the person is and see where it goes. Iâll usually share a bit of my own story too.
But what Iâm thinking in my head is: how magnetic is this person? If this person were to start something, how many of their friends would want to be part of it? Thatâs the number one thing: the magnetism.
Turner Novak:
Thatâs the number one for sure?
Ali Partowi:
For sure. Now, different people can be magnetic in very different ways. You could have someone like Michael Truell, whoâs really quiet, almost shy, but has this calm confidence that draws other people to him. Then you have people who are very flamboyant or just charismatic. Thereâs a wide range, and itâs actually hard for me to give a checklist of what makes a magnetic person. But if I feel it, thatâs super important.
Iâm also looking for risk tolerance. How willing are they to do something no one else has done? Have they failed before? Have they done things that show theyâre not afraid of failure? Failure itself is not good, but the willingness to take a big swing matters. How much have they stayed within the predictable path? Especially for people from top universities, how much are they chasing prestige and ticking boxes versus doing something their peers might be afraid of doing?
I also look for what Iâd call mischief. It can go too far. Iâd define it as a healthy willingness to challenge the rules or see beyond them. Breaking laws is not good, and dishonesty or low integrity is a red flag. But a willingness to recognize that rules are just manmade constructs, to think from first principles: âWhat if this didnât have to exist? What if we could do this?â, and then find a path to make it happen, with an element of grit, of doing whatever it takes.
To give an example: Alfred Lin, who was at my first startup, was a mischievous kid in elementary and middle school. He kept getting into trouble for things like being too good at math. Weird stuff like that.
Turner Novak:
I remember once in first grade, I got in trouble because we had these phonics books where you had to write in words and spell things, and I got in trouble for going too far ahead in the book. I was just skipping through it and kept going. It was a huge deal. The kids in the class were pointing at me. I was like, Iâm just filling out this book.
Ali Partovi:
Thatâs a perfect example, because it encapsulates what Iâm looking for, but also how the system often shuts down people who should be encouraged. Why on earth is there such a rule? What a silly rule.
Turner Novak:
Yeah, because I was bored. I thought, I could sit here and not do anything, or I could keep going while thereâs time.
Ali Partowi:
Iâm looking for the type of person who wouldâve broken that rule rather than been held back by it.
I should also say, when I meet someone, theyâve usually already gone through some level of technical vetting. The prerequisite for us across the board is we invest in technical founders. We do coding tests, reference checks, a whole bunch of things to establish a baseline: this person is a star engineer and builder. All the traits I mentioned are on top of that.
For college students in particular, thousands apply to Neo. The first pass is more of a technical assessment, we narrow it down to about 100 people who you would hire in a heartbeat. We call them Neo Scholar finalists. Then out of those 100, we select a smaller group. Itâs actually been shrinking from 30 when we started nine years ago down to 18 this past year.
Turner Novak:
Whyâd you shrink it?
Ali Partovi:
Because weâve gained confidence in our own selection abilities. On the borderline, itâs hard to know. But the biggest lesson for me over the last nine years is that my team and I are even better at picking than I thought. So letâs double down on our instincts.
Those 18 are people I would fund in almost anything they do. Thatâs definitely how I felt with Michael Truell. Within the first 10 minutes of meeting him, I thought, âI would fund anything this guy does.â And I actually have the notes from that meeting.
Turner Novak:
Yeah, thereâs a picture of the notes in a Forbes article. Thereâs a picture of him with some notes scribbled on there.
Ali Partovi:
Yeah. And I also have the paper-and-pen coding test I gave him.
Turner Novak:
Are all these coding tests written, or some electronic?
Ali Partowi:
Theyâve moved to electronic. When I started in 2017, 2018, 2019, I was personally traveling around the country giving the first-pass test to people. Thousands of people apply now, so I canât do all that anymore. I started out as the first line of defense. Now Iâm like the third or fourth round.
Paper and pen is what Iâm comfortable with, but it has a real advantage: you can see what the personâs brain is doing, rather than relying on a terminal. If you write code and it doesnât work, you can run it and iterate. With paper, you have to think it through first. Youâre crossing things out. I write it and then say, âLook through it and test it in your head.â
That said, I give people easy coding challenges. I never want to see somebody squirming and failing. I try to offer things where everybody is going to succeed. Itâs how they go about it, how they think. That matters more than whether itâs a hard problem. If you give somebody a riddle where 99% of people wonât have the âahaâ moment, youâre not really learning that much.
The other thing I do is let them give me a coding test in return. On the same page where I have Michael Truellâs coding test, he solved it in about 10 minutes, in roughly five lines, and then gave me one. Mine is a page full of crossouts and mistakes.
Turner Novak:
Do they know going in that theyâre going to have to give you one?
Ali Partowi:
I donât think so. I certainly donât say that upfront. And it doesnât always happen. If the person took too long on their test, we run out of time. But this idea wasnât originally mine. It started with Russell Kaplan, one of my favorite stories from the early days of Neo.
I had just started this thing and spread the word, Iâm looking for the top CS students who are potential founders. Iâll be candid: I was pretty insecure. What am I, a balding guy showing up on campus? Who is this guy? Heâs not offering a job. He wants you to take a coding test. And the stakes were real for me. I had told people like Max Levchin and Craig Silverstein, the people who were preparing to fund me, that this is what Iâm going to do. Reid Hoffman was one of our first LPs. Max and Craig and a whole bunch of others gave me money and said they wanted to be part of it, to attend our events and meet these brilliant college students Iâd find. So I was like, where do I even start?
I called a professor, David Malan at Harvard, and said, âWho are the smartest students at Harvard?â He basically said, âLook, Ali, I run a lecture with 800 students. What youâre looking for are the builders, the ones creating projects on the side, not just doing their schoolwork. Talk to the top recruiters. They know the best students because theyâre recruiting them for Facebook or Google.â
David introduced me to Mo Osman, who was a recruiter from Facebook. I had lunch with Mo, and he said, âIâm one of 250 university recruiters at Facebook.â When he said that, I thought, theyâve got an army over there. I do not want to hire 250 people.
He said, âWe go to all these campuses and find the top students. But you probably want the rock stars.â I said, obviously. He said, âNo, ârock starâ is a database designation. Of the thousands of interns we bring back each summer, 12 get designated as rock stars based on their performance and manager feedback. Those 12 get invited to Mark Zuckerbergâs house for dinner. Those are the ones weâre obsessed about hiring full-time.â
I heard this and thought: number one, Iâm clearly not the only one who believes you can find superstars in college. And number two, could I hack this system? What if I could just meet those 12 people?
So I said, âMo, these rock stars, would you happen to know any of them? Can I get an intro?â And he just listed off a couple of names: Willie Zhao, Justin Rosenblum. I said, âCan you introduce me?â He said sure. I was shocked it was that easy. Then I realized, if it was that easy with Facebook, maybe other companies would do the same.
I started calling it Neo Scholars, partly because it sounds more like an academic honor. I sent out a mass email to founders in my portfolio, the Dropbox founders, the Airbnb founders, basically the hot companies of that time. âHey, would you nominate your two best interns to become a Neo Scholar?â
Nate, the co-founder of Airbnb, replied: âAli, I donât know who our two best interns are, we have hundreds, but I can find out.â He emailed me back with a couple of names, then sent warm individual intros to these college kids: âAli is one of our angel investors, heâs awesome, you should meet with him.â That gave me my starting list.
And I would often fly across the country to see one kid. There was one student at Vanderbilt, Jasper Lou. Full trip for one meeting.
Then there was Russell. Someone had made an intro to Russell at Stanford. I showed up dressed up, it was a four oâclock meeting, then I had a cocktail event, then a red eye to go interview students at Rice. Russell said, âWant to go for a walk?â I said okay. What I thought was a leisurely walk turned into a dusty, hour-long trail hike. Russell was grilling me the whole time. âWhat is your intention with this organization? Whatâs your vision?â At the end he said, âAlright, Iâll do the interview.â I said, âIâm out of time. We need to reschedule.â
We met a second time at Coho on Stanfordâs campus. He finished the coding challenge I gave him in 10 or 15 minutes. Then he said, âI have a question for you.â I said, âWhat do you mean?â He said, âI want to give you a coding interview.â No one had done that before. He was like, âIâm going to give you this challenge that none of my roommates and I have solved.â He gave it to me and I solved it in about five minutes. He said, âThatâs just the easy level. Hereâs a harder level.â That took me the rest of the hour, but I solved it. He said, âThatâs as far as my roommates and I have gotten. Hereâs the hardest level, we donât know how to do it.â
I was out of time and had to leave. But I knew I had to solve this. I went home that night, sat at dinner with my wife and kids. My kids were asking why I wasnât speaking, I was working through this problem in my head. Around 1 or 2 AM I emailed Russell the solution. He responded: âOh wow, this is right.â
I had already realized he was going to be a Neo Scholar, not just technically astute, but an unbelievable natural leader. But something clicked between us. He saw in me, essentially, an older version of himself. He was like, âOkay, this guy is one of us.â He then helped me identify the other top people at Stanford and vouched for the organization.
I kept it as part of the process, because it changes the power dynamic. Itâs less about âIâm evaluating youâ and more like weâre peers doing something together.
Turner Novak:
You mentioned the cocktail event, I think thatâs where you kind of formalized the idea for Neo. Steph Curry was there. What happened that night?
Ali Partowi:
Thatâs not where I got the idea. I had been thinking about this for a very long time, itâs actually embarrassing how many years I had been thinking someone should do this. But I didnât have the courage to do it myself. And how I ended up there was a little ridiculous. I was not invited. My twin brother Hadi was invited. I didnât even know about the event. I was having dinner and Hadi called me: âAli, I need a huge favor. I just missed my flight. I was supposed to be in the Bay Area tonight for this cocktail event with the Golden State Warriors. Can you go as me?â
Turner Novak:
You guys are identical twins, right?
Ali Partowi:
We are. I was like, âWhat do you mean, literally as you?â He hadnât fully thought it through. He said, âNo, I mean, can you wear your code.org hat and just kind of look like me? My goal is to get Steph Curry as a spokesperson for code.org. You go accomplish that.â I was like, âI am happy to drop whatever Iâm doing tonight to go to a small gathering with Steph Curry, Andre Iguodala, and basically the whole Warriors team.â So yeah, I dropped everything and found my code.org hat.
It was an event bringing together the Golden State Warriors players with a group of VCs, Ben Horowitz was there, maybe Marc Andreessen, Mark Benioff. I definitely felt like the one who didnât belong. Some imposter syndrome, because A, Iâm not a VC, Iâm a successful person, but I wasnât supposed to be in this room. I was not invited, and even the person I was subbing for was barely supposed to be in the mix.
People were talking about how to make money in Silicon Valley, and specifically whether some of the basketball players might become interested in investing. I was trying to figure out what I had to offer. I was definitely looking for a group that would let me join their conversation.
But I had a job, my brother had told me I needed to get Steph Curry, and I was not going to fail to deliver. It just took me a while to work up the courage. Steph was obviously popular, so I waited for the window.
I went up to him, introduced myself, and started talking about code.org, this amazing organization that teaches computer science to K-12 kids. Itâs a nonprofit with enormous impact. But I had this feeling that maybe Steph wasnât that interested. It felt like he was looking around the room to see if there was somewhere cooler to be. This guyâs talking about nonprofit education, kindergartners, coding.
So thinking on my feet, I said, âYou know what? Computer science is actually very similar to basketball in an interesting way.â He said, âHuh?â I said, âIn both fields, you can spot superstars really young. You can spot basketball talent in eighth grade, certainly by high school or college. Thereâs an entire system in the NBA to scout and recruit those superstars. The same thing is true in computer science. Often the biggest breakthroughs at even a large company are done by one person, Gmail was largely written by one person, Paul Buchheit. Windows was initially a one-man summer project. But whatâs missing is thereâs no system in the tech industry to find that superstar, nurture them, and invest in them when they start a company. And Iâm going to build that.â
At that moment I was laughing at myself, because I had just thrown down my own gauntlet. I wanted to do this, but I was also eliminating my own outs.
Steph was like, âIâm interested in this.â He had an associate with him and said, âCan you exchange contact info?â Turns out Steph never did anything with Neo. But he did become a spokesperson for code.org, so I did deliver what I promised my brother.
I left that event thinking, âAlright, Iâve now attached my name to this goal.â And Iâm not someone who quits after saying Iâm going to do something.
Turner Novak:
And maybe an interesting point to talk about is code.org. Thatâs still a pretty big thing, right? Whatâs the story with code.org? I know youâre doing it with your brother, itâs his full-time thing?
Ali Partovi:
Hadi deserves 99% of the credit, and it is truly, I think when I die, it might still be the most impactful thing Iâve ever done. Itâs unbelievably inspiring.
Itâs not just a nonprofit. Itâs also, I think, the most popular coding environment for kids, it has hundreds of millions of kids writing code on it, though a lot of it is drag-and-drop block-based coding. Itâs introduced hundreds of millions of children to coding. Itâs being taught in millions of classrooms. It is the number one computer science curriculum at every K-12 level.
Turner Novak:
Is it just the code.org website, or is there a specific program?
Ali Partowi:
Itâs the website, and it has grade-level instruction from first grade on up. The team built technology that starts with block-based coding, similar to Scratch, which is also wonderful. For the high school level, thereâs a toggle where you can drag and drop blocks and then flip into real code and back. You can ease into coding.
Where itâs going now, today, a lot of coding as a job is being done by AI. But code.org is now bringing AI into the curriculum in a way that teaches kids how AI works and how you can use it to create, rather than just using it to cheat.
The starting story of code.org is pretty interesting. It started out as just a video, the vision wasnât even to build a giant organization. My brother Hadi, we had just sold our second startup, and it had been a really tough process, ultimately not very successful. We were both taking time off and kind of detoxing. Hadi said, âFor the next two months, my project is going to be to create a short, viral documentary promo for computer science, to get more kids excited about coding, demystify it, and counter the narrative that coding is difficult and only for certain people.â
The narrative in 2012 or 2013 was that all the coding jobs were being outsourced to India, when the truth was itâs actually one of the most lucrative professions there is. The idea was: what if we had a video with people like Bill Gates and Mark Zuckerberg sharing their story of how they learned to code? Hadi actually got Bill and Mark to both agree to do it, and then it was easy to get a whole bunch of other leaders to participate. The video had 10 million views in its first week.
Turner Novak:
There were a couple of women featured in it, I think?
Ali Partowi:
There were multiple women. It was very intentional to have representative role models, both of leaders and of students. But the thing I want to draw out is: this was basically a launch video for nothing. There was nothing else there, no org, no product, no plan.
Then some journalist called to ask about the org. They were like, âTell me about code.org. Whatâs the organizationâs mission? Whatâs the long-term plan?â And we had nothing. But I didnât want to admit that, so I started talking through all the real challenges that could be solved. âWe need political advocacy to make computer science satisfy graduation requirements. We need to build curriculum. We need teacher training, thereâs a shortage of teachers who can teach this.â I just listed all these things as if it were our mission.
The reporter wrote it all into an article. My brother Hadi was like, âWhat did you just do? Whoâs going to do all that?â I was like, âYou will.â I was sort of snickering Hadi into it, though Iâm embellishing a little, because deep down I knew this was what he wanted to do anyway. He was also a little afraid to throw down the gauntlet and say, âI will accomplish these things.â So I sort of did it for him. I think he was both resentful and a little grateful.
For the next three or four months, though, we were in a funk. Weâd had this 10-million-view launch video for an org that didnât exist. We had about a million people whoâd given their email address and nothing to provide them.
One day Hadi called and said, âI know what weâre going to do next. Itâs too hard to start with teacher training for every school or curriculum for every grade. What weâre going to start with is one hour of code. Weâll call it the Hour of Code. Weâll build curriculum for literally one hourâs worth of learning, get partners like Khan Academy to do the same, get celebrities to promote it, and make it an annual event. And we should do it during Computer Science Education Week, the birth dates of Ada Lovelace and Grace Hopper fall in the same week in December.â
He was like, âWe only have five months left. We need to raise millions of dollars and hire people.â It went instantly from a funk to âweâre already behind and we need to start sprinting.â
By December we had Barack Obama posting a video, thousands of schools signed up, celebrity promotion everywhere. Before the launch, our board said, âWhatâs the goal?â Hadi said, â10 million people doing the Hour of Code.â Our board said that was insane, getting 10 million people to do one hour of computer science instruction is totally different from a viral YouTube video. But Hadiâs point was: enough schools had committed to having their whole student body do it. Not just the nerdy kids, everyone. Boys and girls, every age, every background.
By the end of the week, it was 20 million.
Turner Novak:
Thatâs insane.
Ali Partowi:
Yeah. I could go on forever, but this is really my brotherâs accomplishment. I could not be more proud of him.
There is a connection to Neo, though. Many of the people Iâm funding now first learned to code on code.org or through the Hour of Code. I met someone just last week who said their first time coding was on code.org. Itâs a really nice full circle.
Turner Novak:
My daughter does something called Project Lead the Way at school, some coding where you type in a script and things move across the screen, music plays. And she calls it coding. She was in first grade when she started, and she loves it. Sheâs really into music and art and theater, and I wouldnât have expected her to love coding the way she does.
Ali Partowi:
Thereâs a music lab on code.org. A lot of kids donât inherently think they want to do coding, but they love music. In the music lab, you might think of a song, but then you break it down into subparts, the verse, the chorus, the verse has sub-verses, each sub-verse has 12 beats. Coding is very much about taking an intimidating, complicated task and breaking it into digestible little parts. If she hasnât already, have her check out the music lab on code.org.
Turner Novak:
Iâll look into it when I get home. And I was going to ask, because youâve gone all in on the importance of computer science and coding, versus the conversation today of whether you even need to code anymore.
Ali Partowi:
Itâs a valid question, and I strongly believe it still matters. Let me be clear about what I mean. Itâs important to teach coding to every student for the same reason we teach writing and math. Writing is easily done by LLMs now, yet itâs very important to teach people to read and write because it teaches them how to think. We teach the quadratic equation even though most people never use it again. But it teaches us how to solve problems. Coding is an even better way for kids to learn how to think than factoring polynomials. At least with coding, you can make a song, you can imagine building an app, itâs more fun, and it teaches structured thinking and logic, which are useful across many occupations.
One analogy: law. Thatâs done in English, right? But to be a lawyer, you need a whole way of thinking, training, and experience. Just knowing English doesnât mean you can practice law. Iâd say software engineering is becoming similar, the language is becoming just English, but being a really good software engineer is not something just anyone can do. In the same way that knowing English isnât enough to be a great lawyer.
And for me as an investor, strength in computer science is a great predictor of strength in business. Not because someoneâs coding all day, I doubt Satya Nadella is coding all day as CEO of Microsoft. But itâs remarkable how many leaders of great companies studied computer science. Everyone thinks of Bill Gates or Zuckerberg as businessmen almost, but they have this origin story as great coders. And then there are others you donât think of that way, Larry Ellison, Jeff Bezos, Reed Hastings studied computer science. Netflix isnât a software company, itâs mainly an entertainment company. But studying computer science is great preparation for business because it helps you with pattern matching and breaking complicated things into smaller elements, which is relevant to thinking about a business, even if youâre not coding.
Turner Novak:
What do you think, you mentioned the importance of hiring as a founder. Is hiring similar to investing? How should someone think about finding the best talent?
Ali Partowi:
It is similar. In both cases, itâs a form of forecasting. Hiring is forecasting. You should be thinking not just, âCan this person do this job I need done right now?â but, âWhat will this person grow into? Could this person become greater than me?â The dream, if you donât have an ego about it, is that youâre actually excited that this person might outgrow you.
When youâre a founder, you have so many things you stress about, waking up in the middle of the night. When you hire someone great, itâs just such a relief, âThis person is taking care of that. I can sleep because I totally trust them.â Itâs hard to hire people who are so strong that you just know things will be taken care of. But thatâs definitely the holy grail.
Itâs also a mental shift. When youâre starting out and you have three or four challenges, the instinct is, âLet me solve this problem myself.â The new muscle is, âWho is the best person to solve this problem?â Eventually you want to get to where, when new challenges come up, you have three top problems and three top people, âYou solve this one, you solve that one.â Thatâs a new way of dealing with stress. The normal instinct is to figure it out yourself.
Turner Novak:
I feel like a lot of times Iâm talking to someone whoâs 22 or 24, interested in startups, wants a job at one, and theyâre really nervous about reaching out. I usually say, if thereâs a startup that looks really interesting, the founder is probably so busy and so stressed. If you just reach out with a clear âHereâs who I am, hereâs what Iâve noticed youâre hiring for, hereâs what I can doâ, if they read that and think âThis person is going to fix some of my problems,â they will talk to you. A lot of people are almost afraid to reach out.
Ali Partowi:
Thatâs right. Speaking of fear, itâs remarkable how often we all censor ourselves out of some fear of failure. With respect to hiring, a little plug: we at Neo have a recruiting platform where thousands of undergrads going through the Neo Scholar application process are also, with the same evaluations, essentially building a common app profile that startups can access. If youâre a strong enough engineer, if you think youâre in the 98th or 99th percentile, go through the Neo application process. Itâs a time saver. It amortizes what would otherwise be 10 separate sets of interviews across 10 different startups.
But Iâd also say what you just said is contrarian and I agree with it. If you have a real passion for one company, put all your eggs in that basket. Donât cold call the founder. Spend five days figuring out who can give you an introduction. If itâs the place you want more than anything else, itâs worth it. Let it be known that this is what you want.
Turner Novak:
Because they donât want someone whoâs going to half-ass it for a year. They want someone whoâs going to work a hundred hours a week because they love the mission and the product.
Ali Partowi:
Exactly. And if someoneâs doing a scattershot approach, applying to a hundred places with some AI-generated, semi-personalized message, they can tell. Vice versa, if itâs evident that someone has done an unnaturally extreme amount of work to get to that one company, thatâs also very obvious. And other people will want to help them. Itâs very easy to get stakeholders to help you if you take that risk and say, âThis is my dream.â
Turner Novak:
You stand out. Very few other people are doing that. Theyâre all doing the shotgun approach with a hundred applications. And even if someone else is technically a stronger candidate, if you put in more effort, youâll probably get the job.
Ali Partowi:
Correct. And you might actually turn out to be the better candidate because of it. Hiring is forecasting, the person who is so passionate, will they stay a few extra hours? Will they show up earlier? The person for whom this is their dream is actually the better candidate, even if they were a little weaker on some test.
So, the Neo Residency program. It definitely stems from the same belief that we can identify superstars when theyâre still in college. What it has in common with the Teal Fellowship is this idea of giving a young person the space to take a big swing at something they mightâve otherwise been afraid to do, with the financial support to make it possible. Unlike the Teal Fellowship, weâre not forcing anyone to drop out of college. Itâs: take three or four months, build something, take a big swing, and then go back to college if you want.
Weâre planning to do it twice a year, a summer and a winter option. For students, itâs a $40K grant plus $10K invested in our fund. Side by side with the students is a program for startup founders, essentially the same person, four or five years later, now with a team. Thatâs an investment vehicle where we put in $750K uncapped and provide bespoke mentorship, connect them with highly relevant advisors, and it culminates in a demo day to help them raise their next round. So we have these two cohorts going through the same experience side by side.
Weâre now almost finished choosing the first cohorts. Itâs looking like about 12 startups and eight student teams.
Part of whatâs interesting about bringing these two age groups together is a bit inspired by universities. Undergrads work side by side with grad students, working under a postdoc or PhD, ultimately with a professor. Every level is learning from each other. Weâre creating something similar. Just because someoneâs five years older doesnât mean they canât learn from a college student whoâs brilliant at something, and vice versa. Being near someone whoâs ahead of you, or seeing someone coming up behind you, helps people bring their best game. And there are possibilities for unforeseen combinations, a student might say, âMy project isnât making it, but I want to join this startup because I spent time with them and theyâre brilliant.â
We donât prescribe things like that, but our ethos is: bring together brilliant people and let good things follow.
Turner Novak:
So is it sort of like an accelerator? You call it a residency.
Ali Partowi:
We intentionally dropped the word accelerator. We used to have a program called Neo Accelerator. It is sort of like an accelerator, but with a few differences. Itâs not meant to be ABCs for people who donât know what theyâre doing. Itâs for people who have a plan, maybe already have solid Silicon Valley connections. Weâre both lifting them up and bringing them together with others at the same level.
The word âacceleratorâ has also developed a somewhat negative stigma. The challenge four years ago was to make an accelerator thatâs more relevant, reimagine what it can be. I think we accomplished that, but the word still carries certain expectations: this is for people who couldnât raise funding on their own, who need to learn the ABCs. And it carries the expectation that the terms will be bad, giving up a lot of ownership for not very much money. Our funding terms are really good. Theyâre designed so that even if you have a term sheet from a top VC, youâd look at it and think, âMaybe I could do this first and then raise an even better round.â Itâs uncapped.
Turner Novak:
So you basically get the valuation of the next round, which could be anything.
Ali Partowi:
It could be a very bad deal for Neo. The element that makes it work for us is we get a participation right to put in as much money as necessary at the next round to reach 5% total. So your valuation could be $100 million, meaning to get our 5%, weâd need to put in an additional $4.25 million on top of the $750K. Weâre literally getting no upside for having discovered the company earlier. Weâre okay with that because our belief is: we want to invest in the company thatâs going to become worth $10 billion. If thatâs the case, who cares whether we came in at $10 million or $100 million if we own 5%?
The impetus is to make terms so attractive that they draw people who actually do have a term sheet from a top VC, but who see this as a way to be part of a cohort of equally strong people.
This is quite different from what people usually think of with accelerator terms, giving up 5-10% or more for not very much money. Some accelerators are truly predatory: give up 10% for $50K. But Iâd also say there are accelerators that do an incredible job helping people from outside Silicon Valley get access, and whether itâs worth it really depends on what skills and network you already have.
The Neo Residency is not trying to be all things to all people. Weâre trying to be the Stanford, so to speak, of accelerators, for people who donât need an accelerator, but who still benefit from the community and mentorship.
Turner Novak:
And one thing we havenât talked about yet, you grew up in Iran. What was that like? I think you moved to the US in 1984.
Ali Partowi:
The really traumatic part was 1979 to 1984, which was both a revolution and a war. Before that, I had a short stint as a baby living in the US. My dad was a visiting professor at MIT and my mom was getting her masterâs there, so I learned English when I was two. I went to MIT daycare.
Turner Novak:
And then they moved back to Iran.
Ali Partowi:
Then we moved back. I consider myself really blessed because I was surrounded by math and science, nerdy kids from a very young age. My dad wasnât just a professor. He co-founded a great university in Iran, Sharif University, and essentially recruited all the faculty. Sharif today is one of the top universities in the world. There was actually a tweet just yesterday about how itâs the third-highest source of IOI gold medalists.
Turner Novak:
Really? I would not have expected that.
Ali Partowi:
Most people wouldnât. But for me growing up as a little kid, I didnât know any of that stuff. I just knew that it was cool to be good at math and science, and the other kids around me were all smarter than me. I grew up being used to: Iâm happiest when Iâm not the smartest person in the room.
The hardest part was that a lot of my extended family left when the revolution happened, and my social circles shrank quite a bit. There was an era of fear, not knowing whatâs legal, what could get us into trouble. The country was shifting into this very religious Islamic legal structure. As a little kid I was constantly afraid of coming home one day to find my mom wasnât there.
Turner Novak:
Did that happen a lot with other families?
Ali Partowi:
We had one cousin who basically disappeared and was taken to jail. For a woman, if her headscarf was blown back by the wind at the wrong time near enforcement, she could be arrested and punished. I was also afraid of myself being taken to the war, because there was a rumor that kids as young as 12 or 13 were being recruited to the front lines. The rumor was that Iran was using teenagers to clear minefields, to run across and blow themselves up so that soldiers could follow. In fifth grade, one kid who had the worst grades one day stopped showing up to school, and everyone said, âHe probably got taken to the war.â True or not, it was the stuff of nightmares for a little kid.
I was certain Iâd get the best grades so that couldnât happen to me. And I spent the whole time dreaming of being in America. I mostly read English books. I knew all about American culture from reading, American culture from 50 or a hundred years ago. I was reading Peanuts cartoons. I was obsessed with baseball. Couldnât watch it, but we had the official rulebook of baseball and tried to recreate it.
Turner Novak:
Had you ever actually seen it played?
Ali Partowi:
No. We read that a baseball was made out of cork and leather stitched together and tried to figure out how to make one. But we got a whole bunch of kids on our street to play. My brother and I rounded up the neighborhood kids. We admired American culture even though we couldnât see it on TV. I really wanted to be American.
By age 11, I was old enough to understand the premise that all people are equal under the law. The Declaration of Independence is truly a beacon for even fairly young people everywhere. I just dreamed of that. One of my dadâs professor friends told my dad, âYour kids are Americans. They donât belong here. You should let them grow up where they belong.â
Turner Novak:
But he had started this university.
Ali Partowi:
Yeah, it was tough for him. When we came to the US, we were sort of separated for a period, my mom and dad had to go back because we didnât have proper immigration status. My dad was back in Iran for a time and then reunited with us.
Turner Novak:
How do you think that shaped you?
Ali Partowi:
Adversity impacts people in two fairly opposite ways. Some people get stronger. Some people go the other direction. For me, the way Iâve dealt with adversity is mostly: if I survived that, I can survive anything. Itâs a motivator. There are definitely other people who get stuck in the past and canât get out of a difficult experience. A lot of people from Iran lost wealth in the revolution and havenât gotten over that loss.
Our family had a lot of ups and downs, wealth-wise. We came from one of the wealthiest families in Iran, ultra wealthy, and a lot of it was confiscated in the revolution. I went from a lifestyle where our family owned beaches and vast amounts of land to living in an apartment building, and then leaving that behind for the US. In the first several years as a teenager in the US, my brother and I shared two twin beds pushed together.
Turner Novak:
I thought thatâs why theyâre called âtwin bedsâ, because youâre twins.
Ali Partowi:
Thatâs what I thought! But it was my mom, dad, brother, and me, four of us across two twin beds. I learned a lot about how to avoid the middle where you fall between the mattresses.
I had that life at home, but meanwhile my brother and I went to one of the wealthiest private schools in Westchester. It was a real dichotomy. My mom worked as a secretary by day and as a department store sales lady by night, all to put us into a great private school. Seeing my mom make those sacrifices was an incredible motivator, I need to make this education turn into something, and I need to take care of my parents when I grow up.
Iâd say for me and for some of my family members, we come from a family that built a lot in Iran, lost it, and weâre just going to rebuild. Itâs been a motivator.
Turner Novak:
Yeah. My mom worked in a flower shop and got paid in Meijer gift cards, went to school full time, and ran her own business making custom wedding gowns. Sheâs probably done that for the past 40 years. It ebbs and flows, sometimes itâs 80 hours a week, sometimes 10. Now sheâs doing it again full time.
Ali Partowi:
Good for her.
Turner Novak:
And I had one semester in college where I had three jobs and took 18 credits. I was interning at a corporate finance role, interning at a PE firm two days a week, and on the weekends I was taking pictures at bowling tournaments with my stepdad. Bowling tournaments are apparently a pretty big thing. Weâd drive from Grand Rapids down to Cincinnati, always the same bowling alley, 64 lanes completely loaded up with teams. Weâd go out, take pictures of every team at the start of the tournament, print and frame them in the back, then walk out and sell them to the teams. I made a decent amount of money for being in college. Mostly I was trying to avoid student loans, I had realized early on I was $40,000 in debt and just started working. âOh, I didnât have to take student loans this semester.â You just figure out how to make it work.
Ali Partowi:
I love that story. I didnât mention this when you asked what I look for in college students, but I love hearing that somebody made money doing their own thing in college or high school. It doesnât need to be technology-driven at all. Taking photos at a bowling tournament and selling the photo to the team, just figuring out how to do something and sell it. I think it really imprints a young person with the confidence that they can do useful stuff, make money, and handle rejection. Sales is all about rejection.
And itâs remarkable how many stories of great entrepreneurs you can trace back to something entrepreneurial they did in elementary school. My first co-founder, Tony Hsieh, sold worms. Heâd read somewhere that organic farming was held back by a shortage of compost, and he was in about fourth grade. He convinced his parents to buy him a terrarium so he could grow worms and sell them to organic farmers. He didnât actually make much money, it was basically a money-losing business. But he saw it, connected the dots, and wanted to do his own thing.
Fast forward to college: Tony and my other co-founder Sanjay ran the Quincy House Grill at Harvard, essentially a student-run burger joint that got passed down each year from the graduating seniors to the next class with a purchase. Tony and Sanjay decided as juniors to do a two-year stint and invest in a pizza oven to expand beyond just burgers. Tony submitted a bid that said, essentially: âThe next-highest bid plus $1.â He outbid everybody and got it. They made a ton of money running the place.
My classmate Alfred Lin, who lived on like the sixth floor of Quincy House and loved pizza, made his own little side business: heâd ask everyone on his floor if they wanted pizza, go down and buy multiple pies, bring them back up, and sell by the slice. He wasnât even trying to make a profit, but he basically did, just arbitraging the cost of going down to the first floor.
My point with all these stories is that each of these people ended up helping me build my first startup, having already learned how to make money in some clever way. I think that experience is an incredible predictor of future entrepreneurial success. So I definitely look for that when I meet somebody young.
Turner Novak:
My 9-year-old daughter did a garage sale over the summer and randomly decided she wanted to do a lemonade stand. I was like, I love this. By the way, running a lemonade stand as a kid has incredible margins, your parents buy everything and you make all the money.
Ali Partowi:
Totally. But Iâd still say itâs great because youâre getting over the fear of rejection.
Turner Novak:
And I made her talk to everyone. When the first person came up, she didnât really know what to do, and I was like, âJust stand up, go talk to them, ask if they want some lemonade.â We made cookies too. The cookies fed into it, someone would want a cookie and then come back for lemonade, or little kids would drag their parents over for cookies and the parents would get sucked in.
Ali Partowi:
The essence of entrepreneurship, I love the Y Combinator slogan: âMake something people want.â You could say that to a 7-year-old and theyâd understand it. And thatâs basically the same thing as product-market fit. âMake somethingâ is product. âPeople wantâ is market fit. But it says it without the business school jargon. Not all kids actually experience: âI created something people wanted and they gave me money for it.â If you experience that as a young person, itâs really empowering.
Turner Novak:
And a lot of times when someone who hasnât started a business thinks about starting one, they think they need to write a 10-page business plan. Thatâs fine, but itâs unnecessary friction. Distilling it down: you just need to make something people will pay you money for. Thatâs really all you have to do. All those other things are helpful, but you just have to get started. Make something that people want.
Ali Partowi:
I agree.
Turner Novak:
And speaking of jargon, do you have a thesis? Kind of contrasting with everything weâve talked about, youâre very much focused on talent and people. How do you think about having a thesis as a VC?
Ali Partowi:
Not only do I not have one in the traditional sense, Iâd say itâs actually a mistake to have one. My hot take: VC theses are feces. Now Iâll say what I mean. Our thesis, we do have one: invest in people. But what I think is BS is when you go too far in saying, âThis is what I predict is the future of AI,â or âThis is the future of B2B SaaS.â
A smart person can go quite far in mapping out which sectors will have the most value, and a lot of VCs publish their mental maps and predictions. I donât think Iâm good enough at seeing the future to do that accurately. But more importantly: if you do that, youâre going to miss the incredible teams that donât fall on your map. I thought the original idea of Google was stupid. Why make an 11th search engine when there are already 10 highly competitive ones?
Bringing it up to the present day: when Cursor was first fundraising, their idea was autocomplete for CAD, a co-pilot for hardware design. This was before ChatGPT. Sequoia and Founders Fund both saw the pitch. I donât know whether CAD co-pilot was on their thesis map.
Turner Novak:
CAD as in AutoCAD?
Ali Partowi:
Yeah. The idea was: if youâre designing a gear with 100 teeth and youâve designed the first five, itâs clear where youâre going. What if the software could complete the rest of the circle? LLM-type magic for hardware design. But my real point is: I ignored all of that. My whole focus was that Iâd known Michael and Aman since they were 19, and I would invest in anything they do. As soon as they incorporated, I wanted to make sure we could get in.
An even clearer example: when Kalshi was fundraising their seed round, which we led, prediction markets werenât on anybodyâs thesis map. In 2019, if you asked a spectrum of VCs for their thesis, you mightâve heard crypto, B2B SaaS, VR, self-driving cars, the metaverse. Zero attention to prediction markets.
Turner Novak:
I wonder how big the TAM even was. Did prediction markets even exist at that point?
Ali Partowi:
What existed in the United States was a nonprofit, so it was almost the opposite of a TAM. It was legally questionable whether it could ever have a TAM. Predict It was only licensed because it was a nonprofit with a cap on transactions.
But meeting Tarek and Luana, these two are brilliant, and theyâre doing something that will probably fail, but if it succeeds itâll be massive. I donât want to gamble my career on something this high-risk, but they are gambling their entire careers on this all-in bet. I want to bet with them. So yeah, there was definitely an element of âif this succeeds, it would be hugeâ, but more than anything, it was a bet on the people. Definitely not tied to some thesis around prediction markets.
Turner Novak:
So of all the non-people factors, if youâre just talking about the market and the idea, it has to be: if this succeeds, itâs huge?
Ali Partowi:
Correct. My investing is very much based on the people, but then ideas that will probably fail, and if they succeed, theyâll be huge. Iâm explicit in saying âwill probably failâ because I donât want to give a euphemism. Itâs a very real thing, and the fear of failure drives a lot of first-time founders into ideas that will probably succeed, but those are usually the incremental ones. Making a coffee lid thatâs 10% better, versus something like Airbnb.
I missed Airbnb. Brian Chesky was literally sitting next to me at a restaurant, it wasnât even a formal pitch, and he pitched me. Airbnb was such an insane idea. Meanwhile I was hearing pitches from people saying, âWe have software thatâll make hotel pricing 5% more efficient.â Those are incremental. Meanwhile this guy is saying, âWeâre going to replace hotels altogether. Imagine if people would just open their homes to strangers and turn their unused real estate into space they can monetize.â Utterly bonkers. This will probably fail. But if it succeeds, it redefines a sector. Iâm drawn to people who think that way and dare to imagine things that almost feel scary because theyâre so out there.
Turner Novak:
You think a lot about attacking risk, that you should be taking on risk, steering toward it.
Ali Partowi:
A hundred percent. Risk minimization is a huge mistake. You should always be looking to maximize reward, which means look for where the risk is and steer toward it. The word âde-riskâ is interesting, most people think it means making the risk disappear. Thatâs not what it means. It means: do the risky thing, roll the dice, and if you win, now youâve de-risked it. Building a startup is all about going all in at moments of potential existential risk, starting with the business idea, all the way through building it.
But also, the act of doing something risky attracts other people. People are drawn to courage. âThat person is trying something I would be afraid of. Maybe I want to join them.â One of the great examples is Elon Musk. If you look at his videos from before his ventures were successful, he straight-up says, âThis will probably fail.â Or: âOne of the possible outcomes is success.â
Remember the first time Starship was caught by the chopstick arms? Wind back three years to Elon describing the plan. He was like, âTo reduce the weight of the rocket, the landing gear needs to be lighter, so we need to be able to catch it.â One of the possible outcomes is success. He acknowledges straight-up that itâll probably fail. But as long as success is a possibility, itâs a motivator. Each person has their own way of drawing people in, but I think the fundamental thing is: courage attracts other people.
Turner Novak:
And on the flip side of this, youâre starting a podcast. Itâs about embracing failure, really.
Ali Partowi:
It is, yes.
Turner Novak:
Whatâs the podcast? I think youâre launching it in a couple of weeks by the time this comes out.
Ali Partowi:
Itâs going to be called Confession. Itâll invite tech leaders to share a painful lesson theyâve learned, ideally something theyâve never shared before. Some story of an actual mistake or failure, or a difficult lesson or situation that has stayed with them. Showing some vulnerability, but also sharing the lesson.
It stems from having so many failures in my own career. Iâve tweeted about a bunch of them. Itâs therapeutic to share your own failure stories. And it demystifies failure for young people who might look up to you, it helps make it feel more approachable to take risks. I think Iâve got a pretty rockstar group of initial guests Iâve started interviewing, and itâs coming out soon.
Turner Novak:
Whatâs the best way for people to follow you or Neo?
Ali Partowi:
Following me on X, my handle is @apartovi. Iâm surely going to start promoting the podcast there once itâs out.
Turner Novak:
Weâll throw a link to that in the description. We didnât even get a chance to talk about your crazy stories, the Yahoo acquisition that didnât happen, the Steve Jobs acquisition that didnât happen. Weâll throw those links in the description if people want to check them out.
Ali Partowi:
Yeah, Iâve shared those both online. The Steve Jobs one went ultra viral, and it basically hinged on me lying.
I fucked up a $50 million deal with one word that was intended to trick Steve Jobs. He had offered $50 million, and I responded, âI think weâre worth $150 million.â Then I changed my posture and body language and said, âActually, I know weâre worth $150 million.â In that moment, I was hoping to deceive him into thinking we had another offer for $150 million, which we totally did not.
He saw right through it and basically ripped me to shreds. It was very traumatic. I thought the job of a founder was to do whatever it takes to make the company successful.
But the reason it was particularly tough is that, if Iâm being honest with myself, this company was struggling. The job of a CEO of a struggling company is inherently hazardous, youâre trying to make the outside world believe youâre awesome when privately you know all is not well. That encounter with Steve Jobs made me realize I was probably being untruthful more often than Iâd like to admit, in more places than Iâd like to admit. I bet other people were seeing through it and politely moving on. This guy pounced on me, and I lost a major deal because of it. But it was a wake-up call to rethink how I was showing up across the board.
After I posted that story, I thought, well, I also lost a $125 million acquisition by being too honest. So I shared that one too. There are many ways to mess up a deal, and Iâve experienced a lot of them.
Turner Novak:
Weâll let people check those out. This has been awesome. Thanks for taking the time.
Ali Partowi:
Thank you, Turner. Itâs been wonderful to be here.
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