fat startup archetype
Blankfein passed on SpaceX when its valuation was $100 billion, thinking it too expensive. The company is now being discussed at valuations near $1.75 trillion — a 17x miss — illustrating even elite investors routinely misread transformational companies.
“Well, I thought, you know, SpaceX was overpriced at $100 billion market cap.”
Shaan tells the origin of Synthesis: Elon Musk built a school inside SpaceX (Ad Astra) because traditional schooling teaches tools without purpose. Kids learned through competitive, Ender's Game-style simulations, and the game system was later spun out with Elon's blessing.
“his big kind of like theory was, In schools, they teach you, like, here's this tool, right? Like, let's say calculus or algebra, right? Like, here's algebra, go learn algebra. But they don't tell you kind of like why you need to know algebra, right? Like, maybe they should be teaching you how to, you know, run a lemonade stand. And in order to calculate how many lemons you're going to need per day, boom, we'll teach you algebra. That's a tool to help you do this thing you wanted to do. So his big thing was, why don't we teach kids how engines work rather than what a wrench is, as like a basic analogy.”
Both Shaan and Ryan argue the investor 'value-add' after a deal is mostly a load of shit. Ryan reframes network as access: he got into Uber early because of his network, and missed early SpaceX because he wasn't networked there yet.
“I'm saying I got in early to say Uber because of the network. Because of my network. Yeah. And I can't get in early. Like I tried getting in early, you know, to say like, uh, SpaceX, like I wasn't well networked then. Now I became better networked around SpaceX later and I ended up investing later, but like there's certain areas where I have an unfair advantage to getting investments.”
Steal thisUse your network to get into great deals early, not to add value afterward.
Shaan defines the 'fat startup' via Opendoor: start with a big vision, raise tens of millions in equity plus debt early, no MVP, come out swinging with a big team and budget. SpaceX and Tesla are the same archetype.
“Opendoor would be like a fat startup, meaning immediately started with a big, uh, big vision, not like kind of a small like, uh, wedge. Uh, immediately needed a bunch of capital to do this because they had to go buy homes, and every home is expensive. And so they needed tens and tens of millions of dollars pretty early on that they got through equity plus debt. And, um, they didn't have like some MVP. They like came out swinging with a big team, big, big bank budget”
Daniel Gross argues the Silicon Valley myth that everyone starts on grand moonshots is a lie; successful moonshots begin tiny, citing SpaceX's origin as the Green Mars Oasis Project.
“every one of the successful moonshots often starts as a small, fairly stupid project. Project, right? Even SpaceX. Good God, SpaceX, the most moonshot— literal moonshotty company that exists today. People forget, but it started as this thing called the Green Mars Oasis Project. Send a plant into space and put it on Mars. Do everything using Russian rockets. Be as lazy as possible.”
Steal thisDon't wait for a grand vision; ship the small, almost embarrassing first version and let it evolve.