Key Moments
Businessman and former CEO of Xoom Kevin Hartz Interview at the Oxford Union
Oxford UnionKey Moments
Tech is in a "super cycle" driven by GPUs, AI models, and expanded internet access, presenting a once-in-a-lifetime opportunity for founders, though a crash is always possible.
Key Insights
The current tech "super cycle" is driven by advancements in GPUs (NVIDIA), data center build-outs, and foundational AI models from companies like Anthropic and OpenAI.
Young founders, often seen as "misfits" or "dropouts," can have an advantage due to a different perspective on the world, allowing them to "see around corners."
Eventbrite, co-founded with his wife Julia, experienced a dramatic downturn during COVID-19, going from $5 billion in gross merchandise volume to negative revenue almost overnight.
Kevin Hartz invested his entire proceeds from his first company, Connect Group, into the seed round of PayPal, a decision driven by conviction in the team's brilliance and creativity.
Hartz regrets not holding onto Zoom longer, noting that copycat companies emerged and grew significantly in the years following its acquisition by PayPal for over a billion dollars.
Sauron, Hartz's new venture, aims to actively prevent crime using AI, robotics, and managed human oversight, starting with high-end homes and following a Tesla-like strategy for mass adoption.
A "super cycle" of unprecedented tech growth presents a unique founding opportunity.
Kevin Hartz posits that the tech industry is currently experiencing an unprecedented "super cycle" of growth, unlike anything seen before. This cycle is propelled by several key factors: significant advancements at the GPU level, exemplified by NVIDIA's progress; extensive data center build-outs; and the emergence of powerful foundational AI models from companies such as Anthropic and OpenAI. Hartz emphasizes that this robust infrastructure, combined with a vastly expanded global market due to increased internet penetration in developing countries, creates an extraordinary platform for new ventures. He urges aspiring founders that this is a "once in a lifetime type of opportunity" to build companies, though he acknowledges the possibility of a temporary market pause or crash.
History and intellectual curiosity as foundations for spotting opportunities.
Hartz's unconventional academic path, including a master's in history from Oxford, instilled in him a deep appreciation for "learning how to learn" and intellectual curiosity. He likens this drive to that found in the technology industry, a field he initially pursued partly to avoid unchallenging work. His study of history has provided a framework for understanding recurring cycles and patterns, which he believes offers an edge in identifying opportunities. This perspective, he suggests, allows for a more profound understanding of market dynamics and the potential for innovation.
The unique advantage of young, unconventional founders.
Hartz highlights the significant potential of very young founders, often in their late teens, drawing parallels to figures like Bill Gates and Steve Jobs. He argues that youth offers a distinct advantage: a different perspective on the world that allows them to "see around corners" and anticipate future trends in ways that more experienced individuals might miss. He cites the Teal Fellowship, co-founded by Peter Thiel, as an initiative recognizing this emerging group of founders who are increasingly "dropping out" of traditional education to pursue entrepreneurial ventures. These young founders, often perceived as "misfits," are described as fearless, akin to "Marines running into battle," and possess a valuable ability to challenge the status quo.
Lessons learned from the "PayPal Mafia" and early ventures.
While not a direct employee of PayPal, Hartz was an early investor and keenly observed the "PayPal Mafia"—a group of individuals who went on to shape Silicon Valley. He notes that many of these figures were initially discounted "misfits" who, through their collective brilliance and chemistry, achieved remarkable success. His first venture, Connect Group, a high-speed internet provider for hotels, was sold for nearly $10 million within a year to an adult film conglomerate—an experience that amusingly still troubles his parents. Hartz's investment of his entire proceeds into PayPal's seed round demonstrated a strong conviction borne from observing the team's creativity and intelligence. This experience reinforced the lesson of concentrating capital on proven winners and sticking to one's convictions, especially during market downturns like the dot-com crash.
Founders Fund's concentrated investing strategy and the value of collaboration.
A stint at Founders Fund provided Hartz with insights into venture capital strategies. He notes that Founders Fund pioneered a model of concentrated portfolios, investing heavily in a select few promising companies rather than spreading capital thinly across many. This approach has become increasingly prevalent in the industry. Hartz also sought a more collaborative environment, contrasting it with what he perceives as the often solitary nature of venture capital. At his own firm, AAR Capital, he emphasizes building a cohesive investment team that leverages collective skills for better decision-making and faster execution. This philosophy extends to his focus on seed-stage investments, aiming to help founders "get into orbit."
The challenging journey of Zoom and the regret of early sale.
Co-founding Zoom, an international money transfer platform, was a significant success, leading to an IPO and subsequent acquisition by PayPal for over a billion dollars. However, Hartz expresses a degree of regret about selling the company relatively soon after its public offering. He observes that numerous "copycat" companies, like Remitly, emerged and thrived in the same market over the subsequent decade. This experience taught him the difficulty of underestimating the long-term potential of tech opportunities and the importance of patience and continued growth. He humorously floats the idea of convincing Stripe to buy PayPal and then selling it to him, highlighting the enduring value he sees in the business.
Navigating Eventbrite's crisis and building resilience.
Co-founding Eventbrite with his wife, Julia, proved to be a deeply rewarding experience, built on a foundation of complementary roles and mutual respect. The company's core belief is that gathering is a fundamental human need. However, the onset of COVID-19 presented an existential crisis. Eventbrite's Gross Merchandise Volume (GMV) plummeted from nearly $5 billion to negative revenue almost overnight due to mass cancellations and refunds. Hartz and his wife worked intensely from home to cut down the business and secure crucial funding. This period, though harrowing, instilled significant resilience, demonstrating the founder's ability to navigate extreme adversity and make difficult decisions under pressure.
Sauron: Redefining home security with AI and active prevention.
Hartz's latest venture, Sauron, aims to revolutionize home security. He notes the lack of significant innovation in the sector for over a decade, with Ring being a notable recent acquisition. Sauron leverages advancements in robotics, AI, and computer vision, applying technologies developed for self-driving cars to home protection. The company is launching with a focus on high-end homes, utilizing expensive components like LiDAR and 4K sensors, with a strategy to gradually move towards broader market accessibility as manufacturing costs decrease. Sauron offers a managed service with human oversight in Las Vegas, complementing AI-driven automation. The ultimate goal is to shift from passive crime monitoring to active crime prevention through a combination of deterrents like loud noises and flashing lights, and potentially more advanced robotic interventions in the future, following a model similar to Tesla's initial launch of luxury vehicles followed by mass-market adoption.
Mentioned in This Episode
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Common Questions
Kevin Hartz studied history at Oxford and Stanford. This background, combined with his intellectual curiosity and interest in cycles, led him to the tech industry and entrepreneurship. He began by founding Connect Group.
Topics
Mentioned in this video
The location where the interview is taking place.
A fellowship created by Peter Thiel and Luke Nosek to support dropouts starting companies.
The college Kevin Hartz attended for graduate school.
Browser launched by Marc and Dreon, which became a platform for building companies.
Venture capital firm that backed both Eventbrite and Zoom, observed by Hartz for two decades.
Company that emerged from the PC revolution era.
Company that emerged from the PC revolution era.
Kevin Hartz's first company, which provided high-speed internet to hotels.
Company where Julia Hartz worked on shows like Jackass.
Used as an analogy for Sauron's strategy of starting with high-end products (Roadster) and then moving to mass adoption.
Company where Max, the CEO of Sauron, previously ran product for 10 years.
Public company that acquired Connect Group, known for on-demand movies, which turned out to be adult content.
Company co-founded by Bill Gates, mentioned in the context of the personal computing revolution.
A foundational model provider in the current tech super cycle.
Used as an example of a luxury good, positioning Sauron similarly.
Mentioned as a potential acquirer of PayPal in a hypothetical scenario.
Company in which Kevin Hartz was an early seed investor.
Company in which Kevin Hartz was an early seed investor.
Company related to the current GPU up-tick in the tech super cycle.
Company co-founded by Steve Jobs, mentioned in the context of the personal computing revolution.
Company that emerged from the PC revolution era.
Company that produced the x86 chip, crucial infrastructure for the PC revolution.
A foundational model provider in the current tech super cycle.
Company Peter Thiel was building a management team for. Hartz invested in its seed round and observed its growth.
Company for which Kevin Hartz was an early seed investor.
Venture capital firm co-founded by Kevin Hartz, focusing on early-stage investing and collaborative support.
Venture capital firm where Kevin Hartz worked, known for its concentrated portfolio strategy.
Kevin Hartz's new company focused on high-end home security, leveraging AI, robotics, and computer vision.
Kevin Hartz's business partner at AAR Capital, described as diligent and detail-oriented.
Co-founder of Microsoft, mentioned as a teenage founder who launched the personal computing revolution.
Mentioned as an extraordinary person met at Stanford, part of Peter Thiel's influential group.
Met by Kevin Hartz at Stanford, described as an extraordinary individual who reshaped Silicon Valley.
Businessman and former CEO of Xoom, interviewee.
Co-founder of Apple, mentioned as a teenage founder who launched the personal computing revolution.
Co-founder of PayPal, mentioned as an extraordinary individual met at Stanford who attracted unconventional thinkers.
Co-founder of Eventbrite and Kevin Hartz's wife. She transitioned from working at MTV to CEO of a publicly listed tech company.
Colleague from Founders Fund who, with Peter Thiel, created the Teal Fellowship.
Founder of Facebook, mentioned as an example of a dropout who became a successful founder.
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