Kyle Harrison
← All podcasts
interview March 22, 2024

Venture Capital, Mormonism, and Driving Your Own Life

The Idea Exchange · hosted by Tyler Cho

Watch on YouTube ↗

Summary

The most personal of Kyle’s appearances — episode #17 of Tyler Cho’s The Idea Exchange, ~52 minutes, and the only one that spends real time on faith, parenting, note-taking and what he actually wants his life to look like. Recorded in his tenth year of investing, about eighteen months into Contrary.

The origin story, with details that appear nowhere else. The film-major-to-videographer-to-marketplace arc is familiar from his later appearances, but two details here are unique: his “magnum opus was Pokémon Love Song, and it was all downhill from there,” and the reason he called the business a project rather than a company — he was already married, and “I was worried maybe that my mother-in-law would be suspect of me calling that a job.” The friend who redirected him to venture is someone he still works out with in the mornings.

A career explained by exits, not entrances. Kyle says there was no map — he describes “the natural selection of time”, letting opportunities breathe and diving in when one shows real life. What he can articulate is why he left each place, and the sequence is a search for a stage: the Utah seed fund was too early (“you’re just frequently seeing the idea phase over and over” when he wanted companies with meat on the bones), TCV was too late but gave him the rigorous financial-analysis and diligence education he never got in banking, Coatue fit the stage but not the culture (hedge funds run on individual P&Ls, so “if my P&L is up and your P&L is down I am outperforming you” — he preferred collaboration), and Index was tight-knit but twenty years established: “I’m excited and grateful to be along for the ride, but the future of Index was not turning with me.” Contrary was a startup venture fund — young enough to still be forming, established enough that with three kids he wasn’t taking zero-to-one risk.

Why the talent model can’t be copied quickly. The long funnel is the moat: five or six years of touch points — exposure to startups in undergrad, scout investments, a job at a large tech company, then a startup, then their own company — so that by the time someone founds something, “a lot of times these folks won’t even run a process.” Other firms “can’t just snap their fingers,” because the investment compounds only with time. And the research arm exists because private-company storytelling is “so mired in content marketing” — the problem is telling stories pragmatically and detail-oriented, not fluffily, and it recurs at both ends of a career: early you’re trying to understand those stories, later you’re trying to tell them.

Roam, and where the note-taking habit comes from. This is the best account in the corpus of why Kyle keeps records. It traces to his mission and the scriptural idea that “whatsoever you shall record on earth shall be recorded in heaven” — “Mormons are very obsessed with family history… we’re very record-keeping people.” He filled eleven study journals on his mission and has been an avid note-taker since 19. Evernote → Notion → Roam during COVID. What made Roam revelatory was that his thinking was never foldered: unions, city building, architecture, art and Walt Disney’s urban design of Disneyland were all one interconnected web. Roam’s atomic unit of thought — every bullet has a unique identifier, “almost like Excel where you say equals A1” — let him block-reference the F. Scott Fitzgerald first-rate-intelligence quote into a dozen places and then see, in one click, “everywhere in my brain that I’ve ever thought that quote was relevant.” He’s still an hourly active user.

Faith and investing, argued rather than asserted. Two mechanisms. First, life-shape: married at 22, first child at 24, so “I’ve not really been an adult without a wife and kids,” which makes family a prioritization forcing function — “nothing about my life is casual… if I’m doing something it often is taking me away from my family, and so it better be really worth doing.” Plus the mission as resilience training, and his aside on why Utah has such a deep sales bench: “if you can sell Jesus and get rejected in a very personal way, it’s really easy to sell software and get rejected.” Second, and more interesting: belief in God is now genuinely contrarian, especially in Bay Area tech, so holding it honestly forces him to absorb criticism and keep asking why do I believe what I believe — “I don’t think that I’m just like a ‘well, ‘cause the Bible said so’ type of Christian.” He ties that directly to the investing habit of asking where could I be wrong.

Parenting: “whatever you are, be a good one.” From The Rising Generation, and staked out between two positions he thinks both miss something. Palmer Luckey (and Delian at Founders Fund) argue that pursue your passions is often bad advice — statistically you won’t make a living painting. The other camp says that dismissiveness produces a less cultured generation. Kyle’s move is to reject the reactive framing entirely: “rather than telling my kids don’t be an artist, don’t be a YouTuber, don’t play for the NFL — that is very reactive to that child’s progression. Instead it is proactively nurturing that child’s progression.” Be what you want; be excellent at it. His exemplar is MrBeast — a video roughly every ten days for ten years, and constant public thinking about the craft itself. The closing note is about the relationship: a parent’s job evolves from caretaker to advisor and coach, “and you’re not a very good coach if you’re just constantly crapping on everything that’s important to them.”

Talent assessment: learn the rules so you can break them. Via Walter Isaacson’s Da Vinci biography — mastery of texture, shading, perspective precisely so that those rules could be broken, against people who claim they don’t play by the rules while missing the multi-generational foundation underneath. Contrary’s heuristics include the slope of a career, demonstrations of deep obsession (becoming the very best at something even if esoteric), and founder-product fit tested by: if I could call anyone in the world about this problem, would I call this person? Then the honest caveat — the best people often break the rubric. Palmer Luckey didn’t fit the profile, but Contrary saw that he was becoming a conduit for a talent-density shift toward defense, and “that is a thing worth paying attention to even if it doesn’t perfectly fit our rubric.”

Which venture firms deserve to exist. Two forces. Brand and borrowed credibility (Marc Andreessen’s framing): customers and candidates read a known investor as a signal, so success compounds into a halo “even if you’re not a very good firm… not a very good investor,” reinforced by LP loyalty that can persist across a decade of funds. Against that, the question he thinks every firm will eventually have to answer: “if I’m a founder, why would I hire your money?” He sharpens it with two analogies — would you rather have a Harvard degree or a Harvard education, and Warren Buffett’s world’s-greatest-lover framing — landing on aesthetics versus reality. A firm whose only offer is a logo on your website “is not going to stick around forever.”

And the title. A friend’s framework: the world contains people who build and drive trains, and hobos who jump from one train to another. Early on Kyle was happy riding others’ trains because he liked the destination and learned on the journey. He’s candid that he’s still not driving Contrary’s ultimate vision and is fine with that — but “no matter how influential I think I am, or how far up the train I think I am, I’m ultimately never the one leading or dictating where my life goes,” and he thinks he should have learned it earlier. The essay is Driving Your Own Train.

Transcript

Episode #17 of The Idea Exchange, ~52 minutes, hosted by Tyler Cho. ASR errors and names cleaned, text paragraphed — nothing reordered, tightened or summarized. Corrections applied: Coatue, Roam, Anduril, Tiago Forte, David Ogilvy, Seth Godin, F. Scott Fitzgerald, Sebastian Mallaby, Walter Isaacson, David McCullough, Delian, Marc Andreessen, Palmer Luckey, MrBeast, product SKUs, heuristics.

What Contrary is

Tyler Cho: I’m excited to have this conversation mostly because I haven’t had that many deep dives with venture capitalists. You work at Contrary, which is a VC. I wanted to set the ground and just ask what Contrary is, how you define it as a VC firm, and how you first got involved.

Kyle Harrison: Contrary as a venture fund has been around for about five or six years, and the core ethos of the firm is this idea that if we can identify incredibly sharp people as early as possible in their career and then support them throughout their career, you have an unfair advantage in investing in the next generation of great companies.

The way we think about that is identifying people in undergrad, grad school, PhD programs, top companies, whatever. It’s often a little bit of a game of telephone — meeting really sharp people, asking who your smartest friends are, let’s go chat with them, bringing them into the inner circle.

What that translates into from an investing perspective is one of two things. Either we are leading pre-seed and seed rounds into companies started by people in that network — or often by friends of friends of people in that network; it’s very people-centric in the way we think about investing. Or we’re investing in companies where a pretty sizable portion of their early teams came out of the Contrary network — you can look at Ramp and Anduril as examples. We refer to that as investing in talent vortexes. So we’ll also invest at the Series A, the Series B, what have you, into companies where we may not have led those rounds at seed, but we’re seeing those companies as the future talent vortexes: a ton of great people are going to get trained up there and then go start their own companies.

So it often becomes this flywheel of just trying to find the sharpest people and invest where we can to back those kinds of people.

Stumbling into venture

Tyler Cho: I’d like to better understand your path to venture specifically. When I graduated from Stanford in 2019 I’d studied econ, and the traditional career paths were investment banking, consulting, or maybe some sort of biz-ops role at a large tech company. But a lot of people, especially in 2019, their dream job would have been to go into venture capital right out of undergrad — get exposed to cutting-edge ideas and technologies, and fund the future. So I’m curious about your career track. Was venture something you had aspired to?

Kyle Harrison: I very much stumbled into venture in a very specific way. It was not on my radar. I didn’t know a lot of people who worked in startups.

The way it happened was that I was a videographer in undergrad — I was a film major, I was planning to go to Hollywood. And to pay the bills I was making wedding videos and commercials. Eventually it got to the point where I had too many jobs, I couldn’t do them all, so I’d go to a friend of mine who also did videography and say, hey, I’ve got this job for you, can I keep 5% of it and you go do it?

Very quickly I realized that I was dramatically better at selling and getting jobs than I ever was as a videographer. I was never that talented. My magnum opus was Pokémon Love Song, and it was all downhill from there. So I was never very good at that, but I realized I was very good at going out and getting customers.

Over the course of four years, kind of on and off with lots of ups and downs — hiring people, growing — I grew that business and then ended up selling it. What’s always funny to me looking back is that even while I was running it, I never called it a startup. I always called it a project. Part of me feels like that was maybe because I was already married at the time, and I was worried my mother-in-law would be suspect of me calling that a job or a company.

And then when I sold it, I was talking to a friend of mine — who I still know, and I still work out with him in the morning, which is crazy — and I said, I don’t know what to do next. And he said, what did you enjoy most about running that company? And I said, I just loved being a resource for these really passionate creative people. And he said, well, that’s kind of what venture capitalists do. And I said, I don’t know what those words mean.

So I got connected to a seed fund — this was all out in Utah, I grew my company in Utah — and literally at their whiteboard learned what venture capital even is as a business. And I realized, man, this is what I want to run at. So from then on — this year is my tenth year in investing.

Tyler Cho: Congratulations. Was the company something you were doing while you were at college, or full-time immediately after graduating?

Kyle Harrison: I started it while I was in college and then ran it after college. I’d taken time off, run it, come back. I sold it and graduated around the same time, and then was teaching at BYU and working at this seed fund a little bit, doing a bunch of different things while I figured out whether investing was what I wanted to do.

The natural selection of time

Tyler Cho: I’m 27, so I’m always curious about how other people approached their 20s professionally, and what the thinking was at each stage. Looking at your early career — a couple of years at TCV, a couple at Coatue, a couple at Index. Could you talk about how you were thinking through career progression? Was it strategic — this is the map I want to go down — or how serendipitous was it?

Kyle Harrison: There was no map, for sure.

I’ve written before about this idea of the natural selection of time, where I allow things to breathe, and the things I am most interested in or most drawn to end up surviving, and the things I’m less interested in I ultimately pull my attention away from. So my whole life has been very much letting opportunities breathe, and then when one of them feels like it has real life, I dive into it.

The things that were a little more deliberate — that I can articulate — were more the changing points. Why did I want to make a change, as opposed to why did I go to this specific place? It was: what was I looking for, and what was the job to be done that my next thing solved?

My first job in venture was at a seed fund in Utah, and I love those guys and I still know them. But when I looked at seed investing — I had spent most of my time running a company that had meat on the bones, as opposed to the idea phase. In seed investing you’re frequently seeing the idea phase over and over and over again. For me, I was more intellectually stimulated by companies that had a little bit of meat on the bone. They don’t have to be public companies, but to have things going for them — maybe that early inflection point where they’ve hired the initial team, they’ve built the initial product, and now where do we go from here? That was my sweet spot, and I wasn’t getting it in seed investing.

So I thought, I want to go to the later stages of a company’s life. I got connected to a couple of BYU folks at TCV and joined that way. I love TCV — it was a great learning experience — but I realized pretty quickly that I had jumped maybe too far to the other end of the spectrum. When I was there they were investing in very late-stage companies. What I got out of TCV was a very rigorous financial analysis and due diligence education. I never did investment banking, but I think of TCV as the time I was most forced to get into the weeds on a business and really learn the inner workings. That was a really valuable education.

But I realized I really wanted to be investing in the best companies at a stage where I could really engage with the founders. So I started looking for folks who fit that bill, and again similarly just stumbled onto somebody — I cold-messaged a guy at Coatue on LinkedIn and he responded, and that led to the role.

Coatue definitely scratched that itch. I was working much more closely with founders, at the stage and quality of company I was really excited about. The experience I had there — Coatue is primarily a hedge fund; I was working on their private team, but hedge funds have a very specific, distinct culture. And it’s pros and cons: different people thrive in different environments. Sometimes it’s exciting to be competitive externally, but for a lot of people it’s actually motivating to be competitive internally, where you each have a P&L that you’re managing — and if my P&L is up and your P&L is down, I am outperforming you, and it’s pretty easy to see. That culture becomes pervasive, and for a lot of folks that works great. That was not my preference. I was much more excited to collaborate.

So I’d gotten to know a few of the folks at Index, and again it scratched that itch — a much smaller team, much more tight-knit, and I really enjoyed working with folks there.

But even when I was at Coatue, and in particular at Index, I always felt this itch I’d had from running a company: I want to put my fingerprints on something. I want to meaningfully direct the future path of the thing I’m working on. And no disrespect to Index, but it’s a 20-plus-year-old firm. All these firms I’d been at are 15, 20-plus years old, very well established. I’m excited and grateful to be along for the ride, but I was not in a position where the future of Index was turning with me.

So when I started thinking about how to scratch that itch — I wanted to stay investing, I wasn’t ready to start another company. And I started thinking a startup venture fund could be a really interesting middle ground: a firm young enough that it’s still being formed, but established enough. At the time I joined I had three kids, so I wasn’t necessarily looking for zero-to-one risk. And Contrary was the perfect bill, not only because of that setup but because I was really pragmatic about what is the job to be done that I would want a venture fund to solve — what is the product a venture fund that is future-proof should be offering. Contrary was perfectly set up to offer that product.

Positioning, and the long funnel

Tyler Cho: Contrary’s tagline is “talent and research driven.” I’d love to explore both. I’ve been doing a learning sprint on marketing and advertising — compiling ten or fifteen of the books regarded as the best, by David Ogilvy and Claude Hopkins and others. One thing that comes up repeatedly is positioning: the image you conjure in the mind of a consumer can sometimes outweigh the quality of the product itself. It’s not always the best product that wins. Personal brands have become a key part of differentiating yourself as an individual, and firms differentiating themselves too. The whole VC landscape is so competitive — how are you trying to position yourselves strategically?

Kyle Harrison: There’s the existential differentiation — how do we establish a specific philosophical approach to what we do — and then the nuts and bolts, smaller things that aren’t as noticeable from the outside but compound into how we set ourselves apart.

Philosophically first: the vast majority of venture, even though everybody talks about how venture is a relationship business, is very company-centric in everything they do — how they source, how they look to invest, how they negotiate, how they add value.

I joke that in previous roles I would often play the hurry up and wait game. I knew somebody was super sharp, and I was like, okay, as soon as you start a company I’m ready — we can lead your seed round, we can do all this stuff. But until then there’s not a lot I can do. Maybe I can invite you to dinner once a quarter. I’m kind of just waiting around the hoop.

Whereas at Contrary we have deliberately invested in a very long funnel. We want to find people as early as we can. Some people in our network we have known for five or six years — the entire time Contrary has existed. We got to know them in undergrad, helped them get exposure to startups, maybe helped them make some early investments as a scout. Then we helped them get a job at a larger tech company where they can establish themselves and learn a bunch of skills. Then we helped them join a startup, and we invested in that startup, and we helped them build that network. And then they went to start a company — and by that time it’s been four or five years and we’ve had multiple positive touch points. A lot of the time these folks won’t even run a process. They’ll just call us, and they’ve known us long enough that it’s like, we don’t need to shop around, we know you, let’s just do this, we can crush it.

That is a very long game that other firms can’t just snap their fingers and say, ah, we want to do more of that. It takes years of investment, and then that investment compounds over time.

The research-driven element is something that, as we evolve as a firm, we’re constantly looking for what we think of as almost like product SKUs. If I map out somebody’s entire career — from when they’re in school figuring out they like startups, all the way through working at companies, starting companies, exiting companies, angel investing as an exited founder — where are the different points that we can help them?

One of the most slap-us-in-the-face things we noticed is that getting a grasp on, and effectively telling the story of, private companies is really complicated, because it’s so mired in content marketing. It’s very fluffy, it’s press releases. But legitimately getting the story out there, being able to articulate why this is different from that, or how a certain company stands apart — that storytelling aspect is a very common problem you have almost throughout your career. Early in your career you’re trying to understand those stories; later in your career you’re trying to tell those stories. So storytelling is really critical — not in a fluffy narrative sense, but in a pragmatic, detail-oriented sense. That’s where the research element became much more critical.

Then there’s a myriad of micro things — our programming, the relationships, the follow-up, the way we incentivize people to work with us, the way we run Contrary Research — but they’re all informed by: we are trying to find the sharpest people in the world and support them at any point throughout their life.

Ambition is not zero-sum

Tyler Cho: This idea of the best stories winning is something that came up in my marketing sprint too. I’m reminded of a Sam Altman interview where he encourages entrepreneurs not to do commonplace startups, and pushes them to be incredibly ambitious — specifically because the more ambitious your aspirations, the more likely you are to corral a group of people to provide support and energy around you. I think that’s true of companies but also of individuals. There’s a Seth Godin quote that only remarkable products get attention and the boring stuff dies.

Kyle Harrison: Probably the topic I have written most frequently about on my blog is storytelling — narrative and nuance, and finding that effective way to tell a story. There’s a balance between lying and dreaming the dream, and a lot of people walk a fine line between them. I’m much more focused on how you effectively dream the dream.

On ambition — I wrote a post a couple of weeks ago called The Non-Zero-Sum Game of Ambition. The whole idea is that the more we can all do to increase everyone’s ambition — you being more ambitious and me being more ambitious — it’s not a zero-sum game. We can all be incredibly ambitious and chasing really big visions. Maybe if you and I get ambitious in the same direction we start competing with each other, but even competition doesn’t have to whet our ambition — it can be an opportunity to spur it, to drive us to compete harder.

You look at the early PayPal and X.com story. People often talk about the company once it’s combined, and what it did, and the talent density. What they often don’t talk about is that the competition between those two companies was ferocious — and in many ways it was forged in the fires of that competition that made them capable of going forward. Everybody benefits from that.

Writing weekly

Tyler Cho: Your Substack is Investing 101 2.0. You’re an investor of financial capital, but as a human you’re an allocator of your time and energy — and you decided to start this and publish weekly. What was the motivation?

Kyle Harrison: I had written on and off for a while, and then when I went to Coatue — because Coatue is such an active public-markets investor, there are a lot more rules and requirements around stuff — I stopped putting anything out. I wasn’t on Twitter, I wasn’t writing. I thought about it again at Index and didn’t really pick it up again until after I’d left.

One of the biggest drivers — I have this quote on my personal website and on Twitter: “I don’t know what I think until I read what I say.” That’s why I write. But I’d always had this insecurity that writing is just shouting into the void. There’s so much content, so much noise, everybody’s sharing their opinions on everything in every possible digital medium, and I’m just adding to it. I’m not even reading enough of the stuff to feel good about myself — why should I be adding to the pile of unread stuff? That was my biggest limitation to doing it consistently.

A really good friend of mine who I worked with at Index, Rex Woodbury, had written on Substack for a long time, and he helped me change my framing. I actually don’t care if anybody reads my stuff. The most valuable thing is for me to write it and put it out there — it forces me to crystallize my thinking. Even if no one reads it, I am better off having written that thing. But by putting it out there I also invite people to tell me where I’m stupid, or to react to it, and that’s helpful — to see what resonates and what doesn’t. It recrafts my thinking.

So when I set out to write consistently, instead of saying I want to get to this many subscribers or this many views, I set one goal and one goal only: I have to publish once a week. That’s it. I don’t care who reads it, I don’t care how good it is. And if you go back through some of my posts — they are not all winners. Some of them are, I’m running out of time and my kids are screaming and I don’t know what else to write about, and here are some random put-together thoughts. But just keeping that one goal — I’ve kept it every week since 2022, all of ‘22 and ‘23 into today. Thus far I’ve been successful.

Roam, and why he keeps records

Tyler Cho: One of your first posts was a breakdown of Roam and how that tool supercharged your thinking — what Tiago Forte might call a second brain. I find a lot of value in my own personal website, referencing back to books I read, quotes I remembered, essays I published that I’d somehow forgotten. How did you first stumble on Roam, and this broader idea of a web of information where you can tie disparate ideas together?

Kyle Harrison: This goes back to — I served a two-year mission for The Church of Jesus Christ of Latter-day Saints. There’s a scripture, it references the New Testament but it’s in a different book of scripture, that says whatsoever you shall record on earth shall be recorded in heaven. It’s this idea that we should be a record-keeping people: journals are important, histories are important. Mormons are very obsessed with family history. We’re very record-keeping people.

As I learned that on my mission, it became dogmatically entrenched in me. While I was on my mission I filled eleven study journals worth of notes and quotes. So since then I’ve been an avid note-taker — since I was 19 years old. I’ve gone from Evernote to Notion, and then I found Roam during COVID.

The thing that was most powerful about Roam is that I had always had these loosely interconnected thoughts. I thought a lot about unions and had read a bunch about unions and done deep dives into that topic. But I had also thought about city building, and architecture, and art. And there was a bunch of interconnection — city building and Walt Disney: yes, that’s art, but it’s also architecture, because you think about the urban design of Disneyland, and there’s something valuable about that, and that impacts city building and people’s urban experience. All these ideas are interconnected. They do not fit into folders. There’s not a city building folder where I only think about this and only think about that. I was constantly interconnected in my thinking, and that was always really hard for me.

I did the same thing in scriptures — I’d read my scriptures and find a verse and say, this reminds me of this, and I’d have these massive scripture chains of go look at this and go look at this, and these things connect.

So finding Roam was a revelatory experience, and to this day I am an hourly active user. My whole life is in Roam. The most valuable thing is that it has this idea of an atomic unit of a thought. In Roam, every single bullet point throughout the entire database has a unique identifier. It’s almost like Excel where you say equals A1 — there’s something in A1 that I’m now pulling into this thing, and I can trace back where it came from.

Roam has the same thing, where I can block-reference ideas from all across my map. For example, I have a quote from F. Scott Fitzgerald that I really like — that the test of a first-rate intelligence is the ability to hold two opposing ideas in your head at the same time and still be able to function. I have that quote one place in my graph, but I’ve block-referenced it in a dozen places. So I can now see everywhere in my brain that I’ve ever thought that quote was relevant, in one click. It drops down and I can see here’s everywhere I’ve ever thought about this idea in context. That’s really powerful for me — and I have that across every company I’ve thought of, every space I’ve dove deep on, all kinds of different areas of my life.

Faith and investing

Tyler Cho: You mentioned scriptures and your Mormon faith. In venture capital and the technology industry generally, religion can get a pretty bad rap. How do you feel being a member of the LDS church has influenced your investing approach? Are there themes or overlaps in how you think as an investor?

Kyle Harrison: I definitely do think so. Probably the two biggest ways my religious beliefs have impacted my career as an investor —

Number one is just how it impacts my entire life, which informs my career. I got married when I was 22 and had my first kid when I was 24, so I’ve not really been an adult without a wife and kids, and that has dramatically reformed my priorities.

Even going back to my mission — I spent two years getting the most deeply personal rejections every day, all day, that you can experience. There’s a reason Utah has an exceptional pool of sales talent: if you can sell Jesus and get rejected in a very personal way, it’s really easy to sell software and get rejected. That experience on my mission was the most transformative in my life for crafting resilience.

And then my family becomes a critical prioritization forcing function. All of those things have impacted my overall career — what’s a priority to me. Nothing about my life is casual. I don’t have a lot of casual endeavors. If I’m doing something, it often is taking me away from my family, and so it better be really worth doing and a really high priority. That forcing prioritization has been really important.

The second thing — we talk a lot in the investing world about contrarian ideas. And increasingly, believing in God is a contrarian view. In my opinion, being able to analytically and in an intellectually honest way hold a faith in something that is very complex and outside the norm of what most people would think of as falsifiable — that forces me to stand up for a belief that is not commonly held, especially in the circles within tech and a lot of what is very liberal Bay Area culture. It forces me to have something that most people disagree with, and would even think less of me for.

And rather than being dogmatic — oh no, I have all these dumb reasons for thinking what I think and I’m just going to ignore everyone — it is a valuable exercise for me to take in criticisms from other people and say, why do I believe what I believe, even though these people say this, and this person has this point. And that impacts everything I think about my investing.

I just wrote another piece this past week where I talked about how there is value not just in dreaming the dream but in also asking the question: where could I be wrong? That informs and pressure-tests my own thinking. I think I have a pretty well-balanced view — I believe in God, and across a very broad subset of topics that I have thought a lot about I have pretty good reasons for believing certain things. I don’t think that I’m just a “well, ‘cause the Bible said so” type of Christian. I think I’ve thought about it a bit more, and that’s been really valuable for me both in my faith and in just being a more intellectually honest person.

Raising kids: whatever you are, be a good one

Tyler Cho: You have three young kids. You’re an investor, but ultimately you’re a curious learner as well. From the perspective of education — K through 12 and afterwards — how are you thinking about raising your kids? It’s one thing for people to opine on how education should work without kids, but it’s another forcing function when you do have them.

Kyle Harrison: I’ve written a piece about this called The Rising Generation.

If there was one thing — and it’s always funny to me, because the way I heard about this quote was from a comedian who was making fun of it for being stupid, but I think it’s a pretty good quote, and whether or not Abraham Lincoln said it, Wikiquote can decide — the general idea is whatever you are, be a good one. I think that’s a very important foundational thesis statement for the way I think about parenting.

I’ll say two things. Palmer Luckey is one of our portfolio founders — we invested in Anduril — and he talks about this a lot: people tell kids to just pursue your passions, pursue your dreams, and he says in many cases that’s stupid. You love painting? Great — statistically you’re not going to make a lot of money painting, and you’re not going to make a huge contribution to society as a painter, so that’s probably not a good idea to push a ton of people toward.

And then there’s the other group of people who think that’s dismissive — that by not having people more exposed to liberal arts and becoming more cultured, it creates a generation of less sophisticated or thoughtful or human people.

I think both of those are missing an important element. My perspective of whatever you are, be a good one comes from this: I’m not as mad as folks like Palmer, or Delian at Founders Fund, who get pretty fired up about the idea that the number one thing most people want to be is a social media influencer or a YouTuber. I’m not as mad about that. I just recognize the odds — because there aren’t different odds in being a successful YouTuber than there are in playing in the NFL. Candidly, maybe there are better odds of being a creator, because you have a much broader audience and you can find a niche market. There are people on TikTok with millions of followers and all they do is make videos of mushroom foraging and tactics for finding mushrooms. The internet opens up a world of niche markets that the NFL doesn’t have an equivalent to.

So all of this stuff has very low odds. But rather than telling my kids don’t be an artist, don’t be a YouTuber, don’t play for the NFL — that is very reactive to that child’s progression. Instead it is proactively nurturing that child’s progression.

When I think about helping my kids: whatever they want to be, I just want to encourage them to be good at that thing. It’s not that I don’t want you to be an artist. It’s that if you’re going to be an artist, you need to recognize that the odds of being a successful artist are very, very low, and you need to be an absolute master of your craft.

I look at MrBeast — and I love hearing him talk on podcasts, because what he talks about is his craft. There are plenty of people on the internet who have built massive followings for being atrocious, terrible human beings, and that’s a bummer, and I don’t want my kids to do that. But the way MrBeast talks about his craft — I think one stat said if you look at his publishing history, he has posted a YouTube video once every ten days for the last ten years. He constantly talks about understanding the craft of how he does what he does, what’s going to be successful, what people are interested in, how to curate storytelling in a certain way. He’s absolutely a unicorn founder of a massively successful enterprise. My kid, if he wants to be a YouTuber, can be that — but he should recognize the importance of understanding what it means to be good at that thing.

That’s a more informed perspective to help your kids. Because the other thing is, if you just say you can’t be XYZ, and you crap on wanting to be an animator or whatever, you really damage your relationship with your kid. Your job as a parent is supposed to evolve from caretaker early on to more of an advisor and coach later in their life — and you’re not a very good coach if you’re just constantly crapping on everything that’s important to them.

Assessing talent

Tyler Cho: The MrBeast commentary raises a question. You’d hope that if you came across him before he was successful you could pick up cues that would lead you to bet on him — which is what a venture capitalist does. I’m reading The Power Law right now by Sebastian Mallaby, and there’s the sheer number of times notable figures were overlooked by people who seemingly would have had good judgment. How much of talent assessment is intuition versus how much can be boiled down to a science?

Kyle Harrison: There’s a quote in Walter Isaacson’s biography of Leonardo da Vinci — I don’t remember it word for word, I’ve quoted it a couple of times in my writing — where in effect he talks about how Da Vinci became a master student. He understood all the very specific rules of texture and shading and object orientation and perspective. He understood those rules perfectly so that he could break them.

There are a lot of people who just say, I don’t play by the rules, I’m an abstract artist, I do things by my own playbook. What that misses is a multi-generational foundation of principles.

So in most disciplines — and identifying talent is one — there’s a critical element of understanding the rules and heuristics, but then knowing when to break them.

At Contrary we have dozens of heuristics we think about when evaluating talent. One is the slope of someone’s career — how quickly they progress through the things they do. Another is demonstrations of deep obsession, where somebody has become the absolute best at a very specific thing, even if it’s really esoteric — demonstrating the discipline to become one of the very best at that thing. And in particular when it comes to founder-product fit — why this founder for this problem — this isn’t always there, but there’s an element of: if I was trying to solve a problem in this particular space and I could call anyone in the world, would I call this person? Maybe because they have such a unique perspective on the space that it would be the most valuable one, or the most detailed and in-depth understanding.

There are dozens of heuristics like that. But often some of the best people we have found break those rules.

We often say our unique value prop and network is really well built for somebody who’s a first-time founder, or early in their career, or continuing to build out their network. If somebody has been a multiple-time founder with a deep established network, when they start a new company they’re just going to hire the same executives from their last company — we’re maybe not as valuable for those people.

But then one of our most successful portfolio founders is Palmer Luckey. You look at the background he’s had and it is very much outside the typical mold. What we saw was a very specific, unique talent density shift going on: people who have a certain element of patriotism and a certain value system recognize the value of working in defense and want to move toward that — and he was becoming a conduit for that talent. So even though he as an individual didn’t perfectly fit our bill, we didn’t let that turn us off. Rather, we turned around and said, okay, this is going to be a really powerful conduit for these people who do want to change and have a really specific skill set and can now apply it in defense. That is a thing worth paying attention to even if it doesn’t perfectly fit our rubric.

Which venture firms deserve to exist

Tyler Cho: Related to that Lincoln quote — whatever you become, be a good one. You’ve written that there’s a large swath of VCs who probably shouldn’t be in the business of venture capital, and that over time that’ll become clearer. Looking forward five, ten, fifteen years, is it clear to you what the good VCs are doing to stand out versus those that don’t deserve to be playing?

Kyle Harrison: There are two elements.

Number one: in venture, brand is a very powerful dynamic — more so than almost any industry you can think of. Marc Andreessen, in one of his tweetstorms, talks about this idea of borrowed credibility. One of the reasons you want a very well-established, high-brand firm is because customers, candidates, partners are going to look at that and say, oh, this company is backed by so-and-so, I’ve heard of them, that’s a pretty good brand. That’s borrowed credibility — even though I’ve never heard of this company, never heard of this founder, that’s valuable.

So some of it is a halo effect: success breeds success. If you as an investor have been able to invest in a lot of successful companies, that will continue to compound for you — candidly, even if you’re not a very good firm, not very helpful, not a very good investor. That can still compound despite all of that.

In many cases that’s also driven by LP loyalty. If I’m an LP and I’ve invested in a fund and that fund has made me quite a bit of money, I have a very distinct sense of loyalty to the person who has returned meaningful capital to me. That can often last multiple funds — sometimes a decade of funds — because of a handful of successful instances. So one broad swath of why some firms are successful is, in many ways, just because they’ve been successful and lucky, and that compounds as a halo effect.

The other piece: when I look at the firms I see as truly generational — either that have been generationally successful or that I think are poised to be — it boils down to they have a very distinct reason for their existence. The way I frame that is asking the question: if I’m a founder, why would I hire so-and-so’s money?

It brings me back to another question. People say: if you could only have one, would you rather have a Harvard degree or a Harvard education? Most people would probably rather have the Harvard degree — I don’t really care that much about the education, it’s fine. Another way of framing it is Warren Buffett’s: would you rather be known to the world as the world’s greatest lover but actually be the worst, or would you rather be the world’s greatest lover but be known as the world’s worst? What is more important to you — aesthetics or reality? For a lot of people, aesthetics matter more than reality.

So if you think about why am I hiring this firm — oh, it’s just because I’m not going to get anything out of them other than slapping their brand on my website — that is a firm that does not have staying power. It’s not going to stick around forever if it’s just brand. Other firms have answered the question: the reason you hire our money is XYZ. And every great firm has a very specific answer to that question — some better than others, and maybe some are discovering it and figuring it out. But increasingly that will become an important question for every firm to answer.

Tyler Cho: The name of the firm is Contrary, and you referenced the Fitzgerald quote. One thing I’m continually shocked by is that psychology study where a group of confederates just stare at the sky, and random individuals passing by will stop and look up and try to figure out what they’re looking at. This mimetic desire, this herd behavior, and how much it accounts for whether a company is successful or not — the amount that hinges on something that very early on could have gone one way or the other. It’s kind of a cruel thing about reality.

Kyle Harrison: I’ve written about that a fair bit. I used to think that between reality and narrative, ultimately reality would always win out. And increasingly I have come to the conclusion that narrative really can shape reality. I think that’s an element of why storytelling is so important to us as a firm.

And it’s not like there’s lying and exaggeration and content marketing fluff on one side, and then really pragmatic, almost academic-level truth on the other — even academia is sort of drifting toward content marketing. But narrative shapes reality in such a way, this idea of a self-fulfilling prophecy, that I don’t think you can afford to be an intellectual purist and say, no, all we can ever do is explicitly tell the bare-bones facts. You have to be able to tell a story and dream the dream. There is a fine line between lying and exaggerating and committing wire fraud. But being able to craft a narrative is one of the most critical skills — and candidly, when you look at people like Elon Musk, that’s one of the most powerful things he has: the ability to tell an incredibly effective story.

Quake books, and John Quincy Adams

Tyler Cho: You have a bookshelf, a catalog of books you’ve read, and a special category you call quake books — an idea you got from Ryan Holiday — books that had a deep impact on your life. One that piqued my interest was John Quincy Adams: Militant Spirit. What impact did that have on you, and why did it deserve recognition?

Kyle Harrison: It’s really weird. I don’t think John Quincy Adams is anybody’s favorite president — it’s a very weird book to enjoy so much.

Part of where it stems from is that I also read David McCullough’s biography of John Adams while I was living in Boston, years and years ago, and that was a really interesting experience for me. Going back to this idea of narrative and story — contrasting Thomas Jefferson and John Adams is a really interesting exercise in understanding human nature, and understanding why America became the country that it is, and has these weird tastes of human optimism and pessimism counterposed to each other.

The reason I enjoyed John Quincy Adams so much is probably two reasons. Number one, understanding him and his family’s dynamic of educational excellence above anything else. There are stories — for example, when he was the ambassador to Russia, he had a five-year-old son he brought with him, and he had a certain amount of time allotted to his duties, but outside of that he often would spend several hours with his son every morning reading the Bible in English and Latin and talking about what it meant, contributing to his education. There’s power in that value of education. He also later taught a course at Harvard, an oratory class, talking about logic and ethos. There are all these elements of education that were really impactful to me.

But then on top of that, he was a voracious note-taker and journal keeper, and I really resonated with that. In many cases, in the early days of the post-revolution American experiment, there’s a lot of stuff that we only understand because of his journal.

All of those things together really resonated with me on a personal level. I don’t know that he’s always — he’s not the ultimate role model, he’s not the ultimate president. But there was a lot about his life that really impacted me.

Trains and hobos

Tyler Cho: Before we wrap up — you’re in your early 30s. In terms of how you’ve approached or thought about your career in your 20s, and what “success” would look like: has that shifted as you’ve entered your 30s?

Kyle Harrison: A friend of mine told this elaborate analogy to explain life and careerism. The idea is that the world has just two different types of people: people who build and drive trains, and hobos. That’s it. Those are the only two kinds of people. Either you are building and driving your own train, or you are a hobo jumping from somebody else’s train to somebody else’s train — and whether you like it or not, you are along for the ride on that train. There’s probably a pyramid scheme where other people’s trains are actually a microcosm of massive trains driven by BlackRock or whatever, I don’t know.

Thinking about that framework for my life has been very impactful. Earlier in my career it was enough for me to be riding on other people’s trains, because I appreciated the destination, and it was valuable for me to learn along that journey with somebody else on their train ride.

Increasingly it has become important to me — and even, you look at Contrary: I didn’t start Contrary, so I’m still working with somebody who is driving that ultimate vision, and I’m okay with that. But ultimately you’re taking responsibility more and more for the direction of the trains that you’re riding, and that has become more important to me.

Candidly, I think I probably should have learned that lesson earlier in my life: the more I’m riding someone else’s train, no matter how influential I think I am or how far up the train I think I am, I’m ultimately never the one leading or dictating where my life goes. So the more control I can take over my own destination, the more fulfilling that is in my own life — and the prouder I am of the things I accomplish. I think there are far too many people who are happy to ride at the back of other people’s trains.

Tyler Cho: Very well said, Kyle. Appreciate you joining the podcast — really enjoyed the conversation and the preparation in the lead-up, and I’m looking forward to sharing it with the rest of the audience.

Kyle Harrison: This was super fun. Tyler, thank you for having me.

Connections

The show

  • The Idea Exchange · Tyler Cho — episode #17. Kyle’s only appearance on it, and the most personal interview in the corpus.

Essays this episode maps to

Contrary

  • Contrary — why he joined: a startup venture fund, young enough to still be forming, established enough for someone with three kids.
  • Talent Vortex — Ramp and Anduril as the examples, and the long funnel as the reason it can’t be copied quickly.
  • Contrary Research — exists because private-company storytelling is “mired in content marketing,” and because understanding stories early / telling them later is a career-long problem.
  • TCV · Coatue · Index Ventures — the stage-search, and the clearest account of why he left each: too early, too late, wrong culture, too established.

Talent and judgement

  • Walter Isaacson / Leonardo da Vinci — master the rules so you can break them.
  • Contrary’s heuristics — slope of a career, demonstrations of deep obsession, and “if I could call anyone in the world about this problem, would I call this person?”
  • Palmer Luckey — the founder who broke the rubric, backed because he was a conduit for a talent-density shift toward defense.
  • Marc Andreessen on borrowed credibility; Warren Buffett’s aesthetics-vs-reality framing; the Harvard degree vs. Harvard education question. All feeding “why would I hire your money?”

Faith, family, records

  • The Church of Jesus Christ of Latter-day Saints · Mormonism — the mission as resilience training, the Utah sales-talent observation, and belief in God as a genuinely contrarian position that forces the where could I be wrong habit.
  • Roam Research — the record-keeping impulse traced to scripture and eleven mission study journals; Evernote → Notion → Roam; the atomic unit of thought and block references; the F. Scott Fitzgerald quote referenced in a dozen places.
  • Tiago Forte — the second-brain framing the host offers.

Books and people

  • John Quincy Adams — a quake book, via Ryan Holiday’s framing. Educational excellence, teaching his five-year-old son in Russia, the Harvard oratory course, and the journals we still rely on.
  • John Adams / David McCullough — read while living in Boston; the Thomas Jefferson contrast as a way into American character.
  • MrBeast — a video every ten days for ten years; craft as the thing worth teaching a kid.
  • Sebastian Mallaby / Power Law — the host’s current read, and the overlooked-founder problem it documents.
  • PayPal / X.com — competition as the forge, not the drag, on ambition.
  • Elon Musk — narrative ability as a genuine capability.
  • Delian Asparouhov · Founders Fund — the other pole of the pursue-your-passions argument.

Referenced in