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/ 11 min read
Nov 11, 2022
We interviewed Keith Rabois — OpenStore’s CEO, and member of the “PayPal mafia” alongside Peter Thiel and Elon Musk — about what makes a great senior executive, and how to hire the best for your business.
Key takeaways: Keith Rabois believes that a simple key to being a successful CEO is maximizing time spent on high-leverage activities — a focus that even successful leaders sometimes get wrong. When it comes to hiring management, Keith tells us to “find someone who loves doing what you hate” — but if you disagree, here's how to contact him. Rabois’ most notable investments include YouTube, Airbnb, Stripe, Palantir, Eventbrite — and recently Ramp and Faire. And here are the latest podcasts with Keith.
Before we jump into our chat with Keith, let’s take a quick look at his background and achievements to date.
Keith’s professional career didn’t originate in business — after getting his law degree from Harvard, he first found success as a litigator at Wall Street law firm Sullivan and Cromwell. From there he spent 10+ years in key roles at PayPal, LinkedIn, and Square — where he worked with Jack Dorsey to further develop the payments industry. In 2014, Keith co-founded Opendoor to revolutionize the US housing market, alongside Eric Wu, Ian Wong, and JD Ross.
After six years as managing director at Khosla Ventures — and following investments in innovative software-based companies such as DoorDash, Bungalow, Webflow, and more — Keith joined Founders Fund in 2019 to invest in smart, driven people solving difficult problems. During his time there, he’s continued his ventures in the payments industry by investing in Ramp, Affirm, Trade Republic, and more industry-revolutionizing companies.
He has since turned his focus toward e-commerce: buying and running small businesses. In March 2021, Keith founded OpenStore with Jack Abraham, Jeremy Wood, and Matt Lanter.
OpenStore provides Shopify entrepreneurs with what he calls stress relief: either running their stores for them for 1 year and paying them passive income, or freeing up entrepreneurs looking to sell their Shopify stores.
While doing this, Keith relocated to Miami, as did over three-quarters of the OpenStore team. Since 2020, Keith has backed Miami in the East Coast versus Silicon Valley startup debate, so it made perfect sense for him to set up and grow the OpenStore team in Miami.
Now, let’s talk to the man himself — Keith, thanks for taking the time to sit down with us, let’s dive in!
So, Keith, I know a lot of the entrepreneur community are looking to lean into becoming better CEOs, COOs, CMOs, CFOs, and so on. I’d love to share some of your advice on this, and how you’ve improved during your time in business.
You’ve held key roles in several iconic companies, including Square, LinkedIn, and PayPal. What did you learn from those experiences?
“As an executive I’ve learned that you have two primary responsibilities — managing yourself and managing your team. Both are equally important.
Managing yourself is easy, given you can commit to making the necessary changes. You want to focus on how you can best manage your knowledge and your time.”
What do you mean when you say ‘managing yourself’?
“Everything you do during the day: how you manage tasks, how you leverage your knowledge, and how you optimize your time. I encourage executives I work with to do a calendar audit. I ask them to write down their priorities on a whiteboard and then pull up their calendar to see if it reflects their priorities. This is an illuminating exercise as it rarely matches.
In addition, you'll want to focus on inputs over outputs — such as the quality of ideas you’re generating over how much you get done. You’ll want to consistently focus on things that have the greatest impact.”
So, impact is key?
“Exactly, whether that’s selecting the right metrics for a dashboard or crafting a company all-hands deck that affects many or delivering direct feedback that impacts one. Spend time on high-leverage activities.”
What does good management involve?
“Managing your team requires in-depth knowledge — not just of the team, but also of the business. Spend time gathering information from different levels and areas of your organization to avoid any filtering mechanisms when it comes to important information.
One of the jobs as company leader is to help the team focus. When someone comes to me with a long list of things they're working on, I'll often go through it with them and say ‘cut this, cut that — these are the two things to focus on’.
When I worked with Peter [Thiel] at PayPal, he was strict that each person could only have one focus. He would refuse to talk to you about anything other than your one priority.
I'll allow more than one, but I strongly believe in that philosophy of focus.”
“The team you hire at the very beginning is not only there to build the product, but they’re also there to build the company. As Vinod Khosla taught me, ‘the team you build is the company you build’, therefore it’s key you find the right DNA from day one.”
So, your team helps determine the direction of your business. Any tips on what to look out for when building a team?
“First, find complementing skills for your business. The most important thing is to recognize the largest risks to the business, assess which of those risks the current team has proven potential to address, then hire complimentary team members to fill in the gaps.
If you’ve got a founder who’s very naive and very hungry, you want to pair them with someone who's got a lot more experience — that way, you get the benefit of both skill sets.”
That makes a lot of sense, and leads us nicely into our next question — how do you hire executives to build your game changing team?
Let’s get into your advice for those looking to hire executives, rather than moving into the position themselves. You’ve held these roles and you’ve hired these roles — you’re in a pretty unique position to shed light on the ideal candidate.
“Find someone who loves doing what you hate.
The role of executives, especially in startups, is to fill the gap between the skills you currently have on your team, and the market your business operates in. It really depends on your business and what you’re currently working with — you want a senior leader who’s great at all the stuff you aren’t doing.”
OK, so that’s the role you’re trying to fill. Can we unpack this further? What if you find someone whose skill set aligns with what you’re creating, but they just don’t have the vision?
“When assessing candidates, focus on the trajectory of growth. You won’t be able to hire Elon Musk today, but you could have hired him in the early 2000s. The key is to spot the next Elon before he is Elon, which I do by looking at someone’s trajectory of growth, hunger for more, and impatience.
Relatedly, you don’t need experts from day one and that can sometimes blind you to alternative ways of doing things. I focus on smart generalists as they haven’t been biased by their expertise yet.
There are three main things, generally speaking, that you want to consider when hiring a solid executive. That’s the role’s baseline, culture, and mentality.”
Copy. Can we take a closer look at each of these?
You want to set a baseline for what you expect from your executive hire, but Keith, how can a new business owner get started on this?
“Consider connecting with CEOs or COOs in your network to discuss the role. The only goal at this point is to learn. Find out how they approach and view their role as an executive. These people should be so spectacular that you couldn’t hire them if you tried.
You can take this one step further by having someone in the role support you with interviews — or even run them themselves.
When you consider your baseline in hiring, you can have your applicant work on a real problem to see their thought process. That way, you get an idea of how they’ll approach issues within your business. If you can, run this past those CEOs/COOs you’ve previously connected with to get their input on the applicant’s thought process.”
So Keith, you mention the team you build defines your company, and that an executive needs to be able to fit in with and grow that culture. Can you expand on that?
“When I started working at Square, Jack [Dorsey] and I focused on building a culture that revolved around transparency. At PayPal, Peter [Thiel] implemented a merit-acquired culture around managers. Both of these methods greatly impacted how I build teams and culture.
Transparency is key for enabling people to make smart decisions, they need context and all available information. Complete information helps reduce the politics in an organization’s culture. One of the key drivers of politics in an organization is information asymmetry.
A merit-acquired culture dictates that whoever is best at a certain discipline, should be in charge of running it. This avoids frustrating junior people because they know that the person leading them is better at their job than they are. That said, the actual skill of management isn’t intuitive for everyone — you could find an incredible software engineer that struggles with managing people.”
I see, and how do you ensure your team stays on track?
“People often refer to their colleagues as family — ’we’re all one big family’, they say. I disagree — your colleagues are your teammates. You're not a family, you’re a team. Families are all about unconditional love; teams are about pushing yourself to be the best you can be for the benefit of the whole team. That’s how you ensure your culture stays on track.”
Business owners need to find someone who shares their work mentality, correct? For example, you’ve got strong opinions on OKRs (objectives and key results) and you look for people that understand and share that approach.
“Sure, objectives and key results help teams set achievable goals. However, it’s not all about output, is it? Can you tell us why it’s more beneficial to focus on input?
OKRs push your team to focus on short-term wins. They’ll likely hit these goals and call it a job done. However, when you focus on input — you get so much more.
By focusing on the inputs, like quality of thinking and innovative ideas, your team can better use their time to identify opportunities. They don’t have the pressure of impending OKRs, and you’re more likely to see bigger wins — even if they’re a little riskier than your OKRs.
Use this thought process when hiring your next CEO, COO, or other executive — are their inputs what you’re looking for? Or, do they just have an impressive track record of hitting short-term goals?”
Evaluating people to take your business to the next level is a key task for CEOs and COOs. What should business owners look out for when hiring their next executive?
“In my experience, there are four key things to look out for when making a big hiring decision. That’s ownership mentality, strategic thinking, talent attraction, and a company-specific role.”
Sounds good, executive hires can make or break your team — especially in a startup. Could you explain a little more on what you mean by each of these?
“Sure, let’s go through them one by one.
Ownership mentality refers to whether they think like an owner. Do they own mistakes or avoid blame? Do they constantly think about how things could be done better? If yes, you’ve got someone worth working with.
You also want to find someone skilled in strategic thinking. Are they able to balance ideas with your business plan in mind? Can they solve big issues? As an executive they’re going to need to be able to problem solve, and fast.”
Copy! So someone who can think big and prioritize your organization. What about attracting talent and responsibilities?
“Consider the talent attraction capabilities of your potential CEO or COO — how they can help further grow your team. Are they a magnet for talent? Can they bring more skilled individuals to your team from their network?
Finally, consider their skills against the specifics of your business. Are they creating value or protecting it? Different tasks require different skill sets — hire someone who can perform the duties you need from your executive team.”
“I think my top piece of advice for aspiring CEOs and entrepreneurs would be that you have to let your team fail sometimes — especially when it enables them to learn. If someone’s excited about an idea that you know won’t work — let them find that out for themselves.
That doesn’t mean you let them make terrible business decisions. It means that, when the consequences are minimal, you should actively let your team run into and grow from mistakes.
One framework for thinking about this as a 2×2 matrix with reversibility of decision and your own confidence in the correct answer. If it’s an easy decision to reverse and you’re not that confident you’re correct — it’s a great opportunity to let the team learn.
If it’s hard to reverse and you’re confident you’re right then you may want to overrule and point the team in the correct direction. If you’re not that confident but it’s hard to reverse then it’s a sign you may want to dive in more yourself to understand.
Plus, it’s a chance to see what your team can handle. You’ll quickly identify who’s doing well in their role — giving them more and more rope ‘til they can’t handle it is key for finding your team’s capacity.”
What about personal growth as a business leader — any recommendations?
“Sure, take fitness seriously, don’t under-value your time, and read more.”
Cultural Strategy: Using Innovative Ideologies to Build Breakthrough Brands by Douglas Holt and Douglas Cameron
The Score Takes Care of Itself: My Philosophy of Leadership by Bill Walsh
High Output Management by Andrew Grove
“These three books have greatly influenced how I approach business, and made me a better businessman.”
Amazing, thanks Keith! It’s been great chatting with you today. You’ve provided some great insights on the role of CEO and how to hire one.
“Of course, I’m a big believer in raising ambition in society, so I hope this advice inspires readers to dream big.”
Top chats in 2023:
Limited Supply podcast: Keith’s goals with OpenStore
Logan Bartlett’s podcast: Keith’s contrarian outtakes on startups
Nik Sharma with Keith: how to manage multiple Shopify stores
Moiz Ali and Nik Sharma with Keith: easiest way to sell DTC store
Jason Calacanis with Keith: ChatGPT vs. Google
Nik Sharma interview with Keith: how to turn DTC e-commerce into passive income
How to hire experts for your e-commerce store: agencies/freelancers vs. in-house
For investment-related matters, you can reach Keith via email on:
For more info on Keith and his ventures:
Investment portfolio (Crunchbase)
If you’d like to connect with Keith and stay up-to-date on all things Miami, OpenStore, e-commerce, and Founders Fund — you can find him on:
That’s it from us on Keith Rabois’ top tips for CEOs, COOs, and other senior executives. We’ve talked about what makes a great CEO, and how to ensure your next executive hire is the right one. If you have any questions for Keith that you’d like to see in our next chat, then send us an email!
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