The episode features Josh Kushner, founder and managing partner of Thrive Capital, a venture firm he started in 2010 that now manages $15 billion with a team of nine investors. Josh rarely speaks publicly about the firm and their philosophy, making this conversation particularly valuable.

Thrive's first institutional fund was $40 million in 2011, where they led Warby Parker's Series A, invested in Instagram, and incubated Oscar Health, which Josh co-founded. The firm has since invested in category-defining companies including Spotify, Unity, Stripe, Twitch, Slack, and GitHub.

Josh co-founded Oscar Health the same year as Thrive, giving him dual perspective as both investor and entrepreneur. His grandparents were Holocaust survivors, instilling an immigrant mentality and appreciation that perseverance through pain leads to greatness.

The conversation explores Thrive's unconventional approach - stage-agnostic investing, extreme concentration in people and ideas, building companies internally, and maintaining a deliberately small team while managing significant capital.

Philosophy of Staying Out of the Spotlight

Thrive takes a radically different approach to public presence, believing "founders are heroes" and refusing to take credit for their success or seek external validation through industry rankings

"Every single win that we have is the entire firm's win and every single loss that we have is the entire firm's loss" - Josh on why they don't apply to Midas lists or seek individual recognition

The Slack investment exemplifies team philosophy: Josh sourced, underwrote, and joined the board, but partner Kareem (who never met the founder) convinced him to do the deal at a price Josh was nervous about

"If you don't tell your story, someone else will tell it for you" - mentor's advice that led Josh to finally do this interview after a decade of near-total public silence

Negative consequence of silence: confusion about what Thrive actually does, with some thinking they only incubate companies, others believing they're only early or only late stage

Rules, Taste, and Pattern Recognition as Liability

Rick Rubin's chapter "Rules" in The Creative Act is foundational to Thrive's thinking: "Pay attention to what you notice but when no one else sees. Rules are limitations. Rules artists learn are assumptions, they're not absolutes"

"Pattern recognition" is viewed as a negative attribute at Thrive, not positive - it prevents seeing the world differently and understanding what the world can become

Naivety is a powerful thing because younger people are completely unconstrained in how they see the world, while adults learn rules that become deeply constraining

"There have been so many times that we've been told this is not what a venture capital firm is meant to do" - Josh smiles every time, constantly questioning why conventional wisdom must be followed

C.S. Lewis's Inner Ring essay guides Josh's life philosophy: people chase rings to feel included, but once inside realize it's not what they thought, then chase the next ring endlessly

The essay concludes that the goal is to not chase anything, but focus on your craft and people you love

"Unbeknownst to you, you will appear as if you're safe and sound within a ring to the outside world, but you will have absolutely no idea" - Josh keeps this framed in his office

Motivation, Drive, and the Immigrant Mentality

Core Thrive value: "Focus on the inputs, not the outputs" - if you're chasing success you're unlikely to realize it, but if focused on solving a problem you will likely achieve success

Best founders are entirely focused on improving themselves constantly, with self-motivation and self-awareness that creates competition between them and themselves, not external validation

Being based in New York City was deliberate to stay out of the Silicon Valley echo chamber and maintain true independent thought - "I think these are human emotions that you feel when you're in the middle of something"

Josh's grandmother was Holocaust survivor who dug 90-foot tunnel to escape ghetto, joined partisans in forest (Bielski Brigade depicted in movie Defiance), lived in refugee camp, came to America with nothing

His grandfather came as laborer on construction sites, would sleep in homes he was building to save money on gas

Dinner table lessons: "I'm entitled to nothing. America is the greatest country in the world where everything is possible. Perseverance and tenacity and having the capacity to deal with pain leads to greatness"

"If you're not embarrassed about who you were two years ago, you're not growing" - mentor's line that Josh applies to personal life and business, maintaining constant chip on shoulder to improve

Oscar Health: From Broken Ankle to Billion-Dollar Business

Oscar started when Josh broke his ankle playing basketball, went to hospital, got insurance bill home and "had absolutely no idea what it meant" - didn't know benefits, doctors, hospitals, or how to pay claim

The "why now" was extraordinarily clear: Affordable Care Act was transforming healthcare from B2B to B2C, creating moment where new brand could establish trust as consumers made their own decisions

Healthcare represents nearly 20% of US GDP, and barriers to entry which had been impossibly high were suddenly lowered at one specific moment

Consumer choice transforms industries - examples include employees choosing iPhones over company-issued Blackberries, defined benefit moving to defined contribution 401k

Co-founder Mario Schlosser had his first kid at exact same time and equally had terrible healthcare experience - they read the entire Affordable Care Act over a weekend and "got going"

Oscar now has 1 million members and $6.5 billion in revenue after 10 years, but "the first decade is only a couple chapters through what the ultimate story is" - Josh

"The 10 plagues of Oscar": ACA was extremely volatile with 33 new insurance companies created but only 2 remaining, new administration opposed to ACA increased volatility, then global pandemic hit

Core insight: if you start e-commerce today you can plug in Shopify and Stripe, but if you start health insurance company there's very limited technology available - Oscar built the end-to-end operating system

Oscar is the only company that created this end-to-end system enabling longitudinal view of member from start to finish

Next decade focus: deploying LLMs across this product for transformational capabilities

"It's just as hard to start a small business as it is to start a large business. And it only gets harder the larger the business gets" - key takeaway from founding businesses

Josh's wife Carly's wisdom: "You've been saying 'if this happens everything will be in a good place' for years, but you have to accept the challenges are only going to increase"

The bigger the business gets, the harder it gets, so ambition for what you're creating should only be extraordinary from the start

Thrive's Founding Story and Unconventional Strategy

Josh graduated Harvard 2008 where Mark Zuckerberg had started Facebook years prior, inspiring many that "someone who was a peer could build and build at an extraordinary level"

Started social gaming company in college with Mario (Oscar co-founder) that reached tens of millions of people - "that was really intoxicating" but Josh suppressed it to work at Goldman Sachs

At Goldman during 2008 crisis, Josh worked on underwriting Lehman Brothers' real estate assets one Saturday night - the group passed, and Lehman announced bankruptcy the next day

Josh called his father day after Thanksgiving asking if the world had changed forever

Father's response stuck with him: "The world doesn't end very often" - foundational to running toward opportunities when others retreat

General Catalyst partners gave Josh $1 million to invest on his own between first and second year of business school, saying "we think you could be really good at this"

Andy Golden (Princeton CIO) spent time with Josh and had powerful line: "As firms scale, they start to lose a sense of who they are, focus on AUM, do things they weren't good at, leading to vicious cycle"

Lower cost of capital leads to lower human capital and less ambitious people

Less ambitious people leads to lower returns and mediocrity

Josh pitched Andy on being "opportunistic vehicle with capacity to invest across stage, sector and geography" - deeply unconventional when you were either early or late, software or consumer, European or US

First institutional fund (Thrive 2) was $40 million with first incubation Oscar, led Warby Parker Series A, and invested in Instagram at $500 million valuation

Fund 4 was first time Thrive developed frameworks for concentration: 15% position in GitHub, 10% each in Slack, Stripe, and Unity, built Benchling and Lattice from seed to 10% positions, incubated Cedar

Building with Nine Investors and $15 Billion

Thrive manages approximately $15 billion with investment team of only nine people - "our view is the only way to have a team is to have a small team"

"One extraordinary person could do 10 people's jobs" - philosophy that every person hired to investment team has capacity to be a partner, forcing extreme discipline in hiring

"We don't believe in consensus. We don't believe in complete autonomy. We believe in the team" - if Josh can't convince the team to do a deal, they don't do it

Only way to do this is if group of people respects each other's points of views and perspectives

Every single person on investment team has been part of an incubation at Thrive - everyone is building

Hiring philosophy targets people from Blackstone or Bridgewater who were trained with financial lens but realized it wasn't right place for them - creates unique independent thinkers

"If you sit down with anyone at any firm and ask about artificial intelligence, they will regurgitate whatever they heard on whatever podcast they listen to"

Thrive wants people who can give incredible analysis on any topic after one day of preparation and articulate it in intense debate

"Artists like to live in artist colonies" - every person that joins organization should be most extraordinary person possible, irrespective of role they're playing

Dangerous pattern as organizations grow: people start to hire for leverage - Thrive's mindset is everyone hired should be extraordinary and raise the bar

Thrive has started over a dozen businesses, and every single person on current investment team has been part of an incubation - "everyone understands the pain the founders go through"

Real Estate Analogy: Fifth Avenue vs. Jersey City

Josh explains Thrive's strategy to his mom through real estate: at later stages "we invest in Fifth Avenue" - you always pay a fair price for Fifth Avenue because quality compounds

Markets go up and down, but if you invest in quality that quality will compound on itself

There's scarcity value to quality - those who invested in Fifth Avenue a decade ago are happy they have it today

Biggest mistakes at Thrive: "When we've way overpaid for Fifth Avenue or we've bought Third Avenue thinking that it would become Fifth Avenue - and that's just never the case"

Core belief: if concentrated in most exceptional businesses and hold them over very long times, a lot of value in those sectors will ultimately accrue to the number one player

Contrarian view: many firms like to invest in second or third player in an industry, but Thrive wants to partner with most visionary founders building category-defining assets

At earliest stages: We're going to Jersey City, Astoria, Williamsburg, Bed-Stuy - getting into neighborhoods way before anyone else has moved there and dreaming what they can be

What makes a company Fifth Avenue has less to do with revenue or valuation, more to do with how end consumer or customer feels about the product - switching costs are high from love of product

Stripe example: just raised large round, Thrive and partners put $1.75 billion into the company - "I can't think of a better business model and a more extraordinary team" - Josh

Concentration Philosophy and Avoiding Optionality

"We don't believe in optionality" - optionality around processes and opportunities is great, but optionality around deployment of capital is inappropriate when founders have portfolio of one

When Thrive decides to invest, they are all in irrespective of whether it's $5 million Series A or multi-billion dollar later stage investment - no compromises

"Every time that the firm has ever sized down a position based on our perception of risk, it's never led to an extraordinary outcome" - lesson from mistakes

Thrive purposely built small team to create constraint around what they can do - ambition is to be extremely concentrated in both ideas and people at early and later stages

View on market sizing: "There are big markets, there are large markets, and there are infinite markets. And I think the only places that you want to play are in the infinite markets"

Every incubation has grand ambition but usually very specific product as wedge into much larger opportunity - would be dissatisfied if larger opportunity is not captured

Last incubations created by Gaurav, Vince, and Kareem who have "incredible amount of humility and self-awareness around quality of person they ultimately want to work with"

Investment Framework Across Four Categories

Category 1 - Consumer: e-commerce and direct-to-consumer businesses oriented around framework of cost, quality, and convenience - how to sell better product more conveniently at lower cost than incumbent

Examples: Warby Parker, Skims, Harry's, HIMS

Also includes aggregation commerce like Instacart and Fanatics, plus traditional marketplaces

Category 2 - Traditional industries utilizing software or internet distribution to provide better consumer experience in more capital efficient way

Sectors: financial services, healthcare, insurance, real estate

Category 3 - Software: traditional enterprise software investments across various sectors

Category 4 - Software-enabled hardware: Anduril and SpaceX represent this category

Thrive traditionally avoided hardware due to capital requirements and long lead times

But applying operating system on top of hardware is something they've seen work and now pay closer attention to

Thrive applies consumer lens to every single deal whether payments business or enterprise software - "each product has a consumer, it has an enterprise"

Understanding nuance of product and how special it is - whether it's feature or something fundamentally important to someone

Can apply frameworks from one sector to another, but being sector-specific is not something Thrive orients towards

Thrive has always shied away from sector-specific funds - if you have sector fund, you feel pressure to deploy capital into that sector regardless of quality

Crypto: The Discipline to Say No

Thrive has been notable in absence from crypto despite being able to go anywhere and do anything - "we have a core belief that there's an important place in the world for crypto"

Primary reason for struggling with crypto: "It has felt like there's been solutions in search of problems" - tried really hard to understand problems these technologies were solving but couldn't

"There's a difference between a great company and a great investment - don't invest in things that you don't understand. If you don't understand it, you can't invest in it"

Thrive felt "deeply insecure as everyone else was pitching this version of the world" - discipline they brought to sector is something Josh is proud of despite the insecurity

Josh's one tweet per year in 2023: "Where did all the dot eths go? They're gone. No one has NFT profile pics anymore. Did we just erase this from our memories?"

"Blockchain as software is something that we believe in and has an important purpose in the world" - when and if it solves tangible problem they understand, Thrive would be interested

Fintech Investments and Distribution Power

Thrive's fintech portfolio: infrastructure side (Stripe, Plaid), direct consumer (Nubank in Brazil, Monzo in UK, Robinhood), B2B (Ramp), and B2B to consumer (Affirm)

Core thesis: incredible consumerization of financial services products and ability to create meaningful relationships with much less friction has created businesses that grew significantly without customer acquisition

Pattern across portfolio: usually one hero product that leads to incredible demand, but utilizing that distribution to introduce lots of different products over time creates meaningful enterprise value

Thrive is big believers there will continue to be tremendous innovation in financial services space

"We're also tremendously impressed by how some of the incumbents have reacted to the innovation" - acknowledging competitive response from traditional players

AI: Most Exciting Paradigm Shift of Career

"It's the most exciting paradigm shift that I've had the opportunity to be exposed to in my career because of the potential implications of it" - Josh on artificial intelligence

Potential to transform processes, incredible services, and very human real aspects of life including health, drug discovery, and other fundamental areas

Thrive made extremely large investment in OpenAI due to extraordinary product and very high density of talent building in the space

Key investor question: not whether value will be created, but where will value ultimately accrue to - still spending time understanding where it falls beyond OpenAI

Critical insight: "This feels like the first paradigm shift that I've been exposed to in my career where the incumbent has the first right of refusal"

API-based paradigm shift as opposed to operating system-based shift

Every company can access same technology at exact same time and utilize it to improve their businesses

Unlike on-prem to cloud, desktop to mobile, or analog to digital - this can be implemented very seamlessly

Thrive's perspective: AI will be both top line and bottom line creative - can transform enterprise or consumer experience and potentially increase ARPU, plus automate many processes

Daniel Gross and Nat Friedman's "available computer" offering was "brilliant" - orientation of giving compute instead of just money naturally leads to investing in AI companies

Learning from Legends: Mentorship and Wisdom

Bob Iger (Disney CEO) is person Josh admires most for communication - "leads with humility and kindness" with level of self-awareness in his story

Stan Druckenmiller taught Josh to focus on both macro and micro - "incredible lens into the world and all different factors impacting it, but also appreciation for quality of companies and founders"

Also has way of focusing on simplicity that Josh admired

Surprising to see macro guy pop up as early investor in Palantir - "kind of an unbelievable story"

Henry Kravis taught lessons about building a firm and importance of people within organization - "in many respects, created private equity as an industry"

KKR innovated at every step becoming the firm it is today because they created the industry and the LBO

Having Henry as advisor on doing things differently is invaluable given he created the rules

David Geffen has been big proponent of helping Josh not care what other people think from very young age - "you only have one life and you need to live your life and be who you are"

Geffen both showed and told Josh this lesson

"The privilege of a lifetime is being who you are" - Joseph Campbell quote Josh loves, noting it sounds simple but is quite hard to do

Mark Andreessen's generosity at age 25 when Josh shadowed him for days - "had me sit in on all of his meetings" despite just being introduced by Michael Ovitz

Mark started Netscape and is still doing everything possible to be value-added partner to founders

Led to Thrive motto: "We did not start Netscape, so we need to go above and beyond" - reminder that sits on desks

Charlie Munger line that stuck with Josh: "What's the point in telling everyone all that you know? It's a lot more fun to learn about things that you don't know"

Kareem Zaki: Healthcare Investing Genius

Kareem has started three healthcare businesses worth over $1 billion each - "in my view, he is the single best healthcare investor in the world" - Josh

Two types of investors exist in healthcare ecosystem: those who understand healthcare industry and those who understand technology - "very few people understand both, and that's what makes Kareem so special"

Kareem was pre-med, his father's a doctor, always thought he wanted to be doctor until summer internship at Blackstone exposed him to finance world

His love and appreciation for technology and software combined with deep understanding of healthcare industry is what made him so unique in building businesses in that sector

Kareem took kernel of exposure at Thrive and made them a leading firm in healthcare sector - example of how different people push firm in different directions over time

2021 Bubble and Market Discipline

Core insight when Thrive started: perceived risk-reward of venture capital was very different than actual risk-reward - "venture as a term was mislabeled"

In 2021, idea emerged that given value created over last decade, cost of capital for industry should come down - Josh's view was perceived risk-reward was very different than actual in opposite direction

"So many companies were raising so much capital over such short periods of time where progress with products and customer traction were not correlated with valuations, but more with markets they could penetrate"

"Investors don't really know what investors want" - moment where investors told companies to grow at all costs, now telling them to become profitable at all costs

Thrive's view: each company is entirely different conversation, every individual company must think about what's best for them

"There are no generalizations in life - maybe be kind, maybe be good, but when it comes to a company, idea of generalization applying to existing portfolio is deeply flawed"

Thrive's approach during volatility: "Let's actually think about your business as totally independent entity and think about what is best for you to achieve profitable growth over very long period of time"

As people focused on market volatility, Thrive tried to say "what are the things that we think are most special in the world and lean into them" - believe in compounding tailwinds of technology and power of innovation

"There's a huge difference between being an optimist and being delusional" - Thrive is very pragmatic and rational in approach but has to pick correctly

Selling 3% Stake for Operational Wisdom

In January, Thrive sold 3% stake to five individuals: Bob Iger (Disney CEO), Mukesh Ambani (Reliance founder), Xavier Niel (French entrepreneur/investor), Jorge Paulo Lemann (3G founder), Henry Kravis (KKR founder)

Reason for transaction was first principles thinking: "Our best companies have cap tables and they have boards"

As firm has scaled, idea of having people who have built and operated meaningful businesses as part of organization was very exciting - not about capital but about wisdom

Fatherhood and Sabbath: Creating Simplicity

Daniel Ek line before Josh's son Levi was born: "Children fill a void that you didn't know you had" - all cliches of fatherhood are true

Fatherhood leads to level of simplification and prioritization in life that is extremely powerful - Josh always knew he wanted to be present father but when it happens "it's just so magical"

Being parent is first time you both give and feel unconditional love - "there's this incredible feeling that you have when you're a parent to your children that you're just so excited to give"

"The most beautiful thing about being a parent has been seeing her in that way. And I think in many respects, it's made me fall even more in love with her" - Josh on watching Carly as mother

Every Friday night Josh shuts off his phone for Sabbath - he, Carly, and son Levi are together and entirely present

"The ability to almost shut off the world and just be together with each other is something that we look forward to every week"

"It's the greatest thing we could ever imagine" despite both working intensive schedules

"Creating simplicity is complex" - Josh on the work required to maintain simple practices and priorities

Balancing Patience and Impatience

Core insight after 10-11 years: power of balancing patience and impatience - deeply inspired by Berkshire Hathaway's articulation that very few decisions are actually important

"The only way to actually be in a position in which you can make those very few decisions is to be extremely anxious about the fact that you are not seeing everything"

Thrive is incredibly impatient as organization in trying to understand everything possible around every theme, sector, and company

But extremely patient around what they ultimately decide to do - balancing these two is really difficult but has enabled them to get to where they are today

Incredible context switch required: walking out of board meeting of company Josh started himself toward board meeting of company he was just lucky enough to invest in

Data Science Team and Building Products

Thrive didn't have data science team a couple years ago, now 10% of organization is focused on building products for themselves and their companies

Framework: "What is Thrive? Thrive is people, culture, capital, process, and data" - first four are mostly art with some science, but data can be different

If you think about investment firm as effectively proprietary data asset, what could you do with that data to make process better, culture better, enable more efficient capital deployment?

Results: capacity to make better decisions, have more informed perspective and prepared mind, and be much more meaningful partner to founders

Applications: information pushed to investing team they wouldn't have found on own devices, reporting or telemetry for founders on their industry - custom in each situation but requires data store

Thrive builds many products for themselves to help have more informed perspective on everything they're doing

Winning Through Substance, Not Marketing

"We always want to win through substance" - whenever competing in process, want those they've worked with in past to speak about who they are, their values, and what they stand for

Many extraordinary firms do very different things with different mindsets - founders might want one versus another depending on their needs

Josh has ton of admiration for Andreessen Horowitz and especially Sequoia for three reasons: maintained culture for almost 50 years (aspiration for Thrive), deeply committed to talent, and "founders still want to tell their parents that they took money from Sequoia"

Fascinating that Sequoia and Andreessen are huge enormous firms yet still maintain that brand and reputation - "it's remarkable"

Hard for founders to choose partners because everyone says same things and sometimes does same things - important decisions get made very quickly and people end up in bad position on both sides

Reputations are built slowly via word of mouth - hard to understand how incredibly quiet Thrive is yet they're invested in who's who of this generation's technology businesses

The Kindest Act: Concert Tickets and Serendipity

In high school, Josh traveled to NYC concert and got held up at knifepoint - person took his tickets, leaving him stunned and shocked

About 10 minutes later, someone came up and said "I just saw what happened from a distance. I have an extra ticket and here's that ticket" - really stunning experience

Three years later at NBA draft, Josh sat in his seat and looked to his left - the person who gave him the ticket was sitting right next to him

The person was artist Adam Port who painted pictures of famous NBA players

Josh was stunned by capacity to meet him and actually thank him

Lesson for Josh at that moment: "You see someone down, do whatever you can to support them" - those who have bear-hugged him at different moments are ones he appreciates and loves most

Adam Port gave Josh his business card which has sat on his desk for last 10-11 years - alongside the framed C.S. Lewis Inner Ring essay