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Demystifying the conversations we're already here at RRE and with our portfolio companies. In each episode, your hosts, Will Porteous, Raju Rishi, and Jason Black will dive deeply into topics that are shaping the future, from satellite technology to digital health, to venture investing, and much more.
Raju: Yeah, what’s your favorite Australian actor?
Gaurav: Listen, I got to say Hugh Jackman. I mean, look, this is a long list, but I think Hugh Jackman is such a talented, multi-dimensional performer. He can do it all. He’s like, he’s irritatingly handsome, he’s irritatingly nice, he’s thoughtful, he’s ta—
Raju: I mean, said the same thing about you, Gaurav.
Gaurav: Oh, did he? Okay.
Raju: Yeah. Yeah, yeah, yeah [laugh].
Will: [laugh].
Gaurav: He’s just a hard person not to like.
Will: I’m Will Porteous.
Raju: And I’m Raju Rishi. Welcome to RRE POV, the show in which we record the conversations we’re already having among ourselves, our entrepreneurs, and industry leaders for you to listen in on.
Hey listeners, this is Raju Rishi, and thank you for joining us for another episode of RRE POV. Today, my partner Will Porteous and I are joined with Gaurav Sharma, CEO and co-founder of Capitalize, one of our portfolio companies. Garurav started his career as an investment analyst at UBS and Highbridge Capital Management, followed by six years as an investor at Greenlight Capital. And finally, he started Capitalize roughly five years ago, and has been CEO there ever since. Thank you for joining us, Gaurav.
Gaurav: Raju, great to be here. Will, thanks for having me.
Will: Glad to have you on the show.
Gaurav: Yeah, long time listener, and very excited to have this conversation.
Raju: Oh, my God. We’re also delighted. First Australian we’ve had on here, or Australian-accented person. So clearly, based on the accent, you weren’t raised in the US.
Gaurav: It’s a fake Australian accent, but I’m glad that I’ve fooled you, Raju and Will.
Raju: Oh, my God. It sounds—I mean, my wife salivates every time she hears you on the phone, so like, I don’t even know. Like, can you share a bit about your life story and what kind of brought you to the US, where you originated, and all that?
Gaurav: Happy to. And listen, thank you again for having me. It’s funny, you know, I ask everyone on my executive leadership team to listen to the RRE POV podcasts regularly, so you know, they’re going to skewer me once they hear this, but—
Raju: [laugh].
Will: [laugh].
Gaurav: —[crosstalk 00:02:16] glad to be here and provide, you know, provide some thoughts and entertainment, hopefully. So, you’re exactly right, as you can probably tell from the weird accent. I grew up outside the US. So, I grew up in Australia. Was born there, sort of, the land very, very far away.
And, you know, I was born there, and did my schooling there. So, high school and most of my university degrees. I studied a double degree in finance and law, and then ended up spending a bunch of time studying abroad. So, I was one of those kids that, like many Australians, just love to travel, and what I realized was I could combine university with travel, and so I ended up basically spending, like, 40% of my degree at universities around the world, including a couple here in the US, and then one in Europe.
And I was studying finance, and that’s what I was really interested in, and, you know, both investing and sort of asset management, and so it just made a lot of sense, personally for me to start my career in New York, and then also, just loved the city. So, one of the places I studied abroad was—I was very fortunate to study abroad here at NYU. And as you know, a 20, 21-year-old living in New York, coming from Sydney—which is a fairly big city—I was just taken with the energy of the place. Raju and Will, as you know, it’s intoxicating, it’s energizing, and so for me, it just, it was just the place to be.
Raju: Absolutely. I couldn’t agree with you more. I love New York. It is very intoxicating. So, your interest in financial services, was there something in particular that drew you to that field?
Gaurav: Yeah. Look, I think a few things maybe, you know, a school teacher of mine made me watch Wall Street at some point—
Will: [laugh].
Gaurav: —and I took away the exact wrong lesson. So, I hope Oliver Stone is not a listener of the podcast. Maybe he is. But you know, I remember watching that again as, like, a 13, 14-year-old taking away exactly the wrong lesson, and thinking that was pretty cool, you know, being able to invest, and sort of the mechanics of the market, and you know, I’m half joking, but I think it was, you know, probably early on, just a sensationalized view of what corporate finance was, right? It was fast-paced, it was abstract, you got to have high impact, and really analytical, clever, motivated, smart people.
And so, I think that was the initial draw. I think over time, it became much more than that. And I think for me, you know, finance and financial services is a way to have a huge impact, right, on people, the way they live their lives, the aggregate economy as a whole. I mean, if you think about finance, it goes back millennia, right? The invention of credit is arguably one of the greatest inventions in the world. It’s catalyzed so much of what we view as the modern commercial and capitalist system.
And so, I think, you know, I was always an abstract thinker, much more abstract than practical. I have very little practical—as my wife tells me—you know, I have few skills that are practical, but have always been really interested in the way financial markets and financial services work, and it has always felt like a way where if you did it right, you could have positive and outsized impact on people and the world. And so, I think it’s a combination of, you know, finding that fascinating intellectually, and then also being able to rationalize it, you know, from the perspective of mission and impact.
Raju: That’s amazing.
Will: Well, it sounds like you really kind of found your personal mission in the midst of all that glamor. And kind of the fancy message of the Wall Street film and others is, with that within that there’s the opportunity to have a huge impact. Like is the hallmark of the way most entrepreneurs think.
Gaurav: Yeah, completely.
Raju: That’s a really good thing you didn’t see the Wolf of Wall Street then.
Will: [laugh].
Gaurav: I think that’s right.
Raju: I mean, you might have a very different vantage point on life. Although one of your fellow Australians was in that movie, Margot Robbie.
Gaurav: That’s right, Margot Robbie, very talented actress.
Raju: Oh, my God, yeah. We’ll touch on her later in this podcast [laugh]. Trying to figure out who’s the most famous Australian. Right now, it’s Gaurav Sharma.
Gaurav: Right. I’m glad I’m giving Margot Robbie, and Russell Crowe, and Hugh Jackman a run for their money.
Raju: Yeah, yeah. I mean, like, at least to me, you’re the most famous one, so.
Gaurav: I appreciate that. I appreciate that.
Raju: Okay. So, you know, ten years at various marquis financial institutions, an amazing career trajectory, and you decided to pick up and change directions and start Capitalize. What was the impetus of that?
Gaurav: Yeah. Let me give you a little bit of context on sort of how I came to it, and I think it becomes sort of clearer. So, you’re exactly right. I was very lucky to work with some amazing people at some amazing institutions. So, you know, I started my traditional finance career, you know, like, many folks in the investment banking industry, at UBS and Morgan Stanley, advising banks and fintech companies on things like M&A and capital raising, and from there, really wanted to learn how to invest.
So, I fascinated, from a young age, in investing, and so transitioning to the hedge fund industry at Highbridge, which is a part of JP Morgan and their [alternatives 00:07:34] business, and then you got really lucky and had the chance to work for a legendary investor by the name of David Einhorn, who had co-founded a hedge fund called Greenlight Capital in the mid-’90s and had turned it into one of the preeminent public markets investing firms in the world. And David was and is an absolute legend, and so I had the great honor and fortune of working directly for him and learning how to invest. And so, that was six-and-a-half years of really great work, and about the first ten years of my career in traditional finance.
And I loved it. I had a blast, right? I found it fast paced, interesting, analytical, stimulating, and rewarding. But towards the end of my time there, I think two things happened. One was that entrepreneurial urge, which I’m sure a lot of your founders feel, just started to kick in. And I think for me, it goes back a long ways.
My dad was an entrepreneur, kind of serial entrepreneur in Australia, started in technology, actually importing computer parts. This was before Dell, really, at the beginning of the PC revolution, and so he was one of the first importers of computer parts in Australia, and sort of built a business that way. And then eventually went into telecommunications, and, you know, had his fair share of ups and downs. But I’d always seen that journey, and it had felt interesting to me. And so, you know, I was, after ten years in finance, and having had a great sort of run, I was at a time in my life where that started to feel more relevant to me. Like, you know, if I’m going to do something and I want to do something interesting, you know, this is sort of the time.
Raju: But can I pause you for this for one second?
Gaurav: Yeah.
Raju: Indian family, right?
Gaurav: Correct. Yep, mm-hm.
Raju: And you have this highly successful career, and you go and call your mom and dad, and you say, “Hey, I’m going to quit.” Because I’ve done this. I’ve done this exact track, right, where you’re like, okay, you’re an executive, and you’re kind of moving up the ranks, and now you’re like—and dad was an entrepreneur, so it’s totally fair game. Like, you know, you can justify it easily. But, like, what did they say?
Gaurav: You know what? It’s so funny. I think my dad got it, and my mom was like, “Are you sure you want to do this? Are you sure?” The repeated, “Are you sure?” But you know it is classic. But I think they got it, right. I think they’d done it. Maybe on some level, they hoped that it would skip a generation, you know, and live a calmer life that doesn’t involve all the ups and downs and high-highs and low-lows of being a founder. But I think they eventually got it, you know.
Will: Well, yeah.
Raju: Yeah. Were you married at the time you started this company?
Gaurav: I wasn’t. I think I was engaged, so I had recently proposed, and you know, as my wife likes remind me, I was calm, I was relaxed, I was in [shape 00:10:24], then I completely bated and switched her, that I went to [start a 00:10:28] company. And, you know, actually, to be fair, she had been a founder herself.
Raju: I know. I actually met her at ERA.
Gaurav: That’s right, that’s right. And so, you know, she had the fortune of working, you know, with the AirBNB guys. Actually she was employee number five or six, and so she saw that journey with them, and then she had her own. So, you know, I think she got it, too, eventually.
Will: Well, I actually want to turn the page back even further for a second. The fact that you started your career as an investor is actually quite meaningful, I think, in this because we get a lot of people who come from Wall Street to an entrepreneurial life, and most of them have learned about working hard, but in an investing context, you also learn that you have to be right on top of your hard work. I’d be curious how you think your time with David Einhorn has informed growing what you’re doing now. And Raju, I know I’m jumping ahead, but I think it’s very rare to find someone who is truly an investor and trained on a on such a major platform, who’s now building a company.
Gaurav: Yeah. So, I think it’s a few things. So, I think you have to develop certain things as an investor that I think are very applicable to starting a company, and then you also have to develop some things that you probably don’t spend a lot of time working on as an investor. And so, I think for me, it’s been both of those things. But I think what was really translatable—I think it’s a few things—I think one, you know, as you put it, you got to be right.
And the way I think about it is you have to be intellectually honest, right? So, when you’re investing, whether it’s in the private markets or the public markets, you have a hypothesis, right, and you have a thesis, and you’re constantly trying to get data points to validate or invalidate that thesis, right? And so, I think one of the things that I learned, and frankly, that I encourage a lot of entrepreneurs, is to just think about what they’re doing in terms of hypotheses, right—and again, this is sort of Eric Ries in the Lean Startup as well, so there’s a lot of overlap—but I think one, being intellectually honest and viewing things that way.
I think second, you have to be analytical, right, but not too analytical, right? And so, I think when you’re investing, you’re dealing with imperfect information. You’re never going to have all the data, right? You certainly wish you had all the data, but you’re not going to get it, and so you need to get really good at making decisions without all the information. And I think that’s also what you do as a founder, as an entrepreneur, right? And so, I think those things.
And then understanding businesses, you know, I work with some great investors, got to study a lot of businesses, understand business models, industry structures, some of that definitely helped, for sure. So, I think a lot that I pulled from the investing experience.
Raju: So, let’s go forward then to Capitalize. You know, obviously you had the bug, and your dad was an entrepreneur, which is fantastic. My dad also was… he was an entrepreneur, but I mentioned this in a prior episode. I mean, he took a lot of risk and brought us to this country, and kind of look at him as a role model, and so you probably have that same kind of view on things. Why Capitalize? What was about this business?
Gaurav: Yeah, so the second part of why, you know, sort of one, the entrepreneurial itch. The second was just getting really fascinated with the retirement savings market here. And I think—you know, in the US and the way that’s evolved. I think some of that was probably me benefiting from being a bit of an outsider, right? I came to the US, I wasn’t familiar with the system and the model, and had come from Australia, where actually people really like the retirement savings market.
You know, not to nerd out too much, but, you know, there’s a good model there. It’s called superannuation—you know, you guys are probably familiar with it—and it works. And it’s just taken for granted. It’s highly successful. And so, I came to the US, and I was like, what is this hodgepodge of 401(k)s, and IRAs, and SEPs, and Traditionals, and Roths, and Simples, and so forth.
And so, I’d always been a little fascinated with how and why that existed. And so, as I thought about places that I could have an impact, one of the things that just I kept coming back to was, why is the retirement savings market so complicated? Why is it—you know, what is it? Let me pull on those threads. And so, I ended up pulling on a bunch of threads and founding, eventually what became Capitalize, with a mission to help people save their time.
Now, we do that in a few specific ways, which I’ll come to in a second, but I think it’s again, comes back to everyone’s got to save for retirement, and if we can help them do that in an effective way, we can have a big impact on the way people end up, you know, in their ’60s, ’70s, and ’80s. And so, I think it was a sense of mission, and then a sense of fascination with the market, and a recognition that there are things that can be fixed here, which, you know, we can get into.
Raju: Oh, that’s amazing. I love the passion, and I love the mission statement. I really love it. And obviously I love it enough to have invested [laugh].
Gaurav: [laugh].
Will: [laugh].
Raju: So, you know you are, you’re kind of a very special entrepreneur in the sense that you have, not just domain knowledge, but you have an intellectual curiosity and an honesty about you that I think some people… they have part of it. They don’t have the full equation. I mean that honesty is really important because sometimes you have to shift gears a little bit. And instead of saying, like, maniacally focused on getting from Step A to Step B, you realize that B-prime is the goal. And, you know, honesty is a really, really important characteristic. So, just for our listeners’ benefit, can you describe what Capitalize does and what problem it solves, first for the consumers, and then secondly, for your business partners?
Gaurav: Yep. So, very high level what we do is we help individuals and financial institutions find and transfer retirement assets like 401(k)s and IRAs. So, let me take a step back and tell you why it’s important. So, the main way that people save for retirement today in the US is through a workplace plan like a 401(k), right? We go to an employer, we save some money in a 401(k).
The problem is that we change jobs every three or four years, right? And so, every three or four years, people are like, “Well, hey, what do I do with this money? How do I go interact with a brand new 401(k), and a new employer?” And the system was never designed. It evolved over 40, 50, years. The 401(k) refers to a section of the Internal Revenue Code that was never meant to be a retirement savings account, but it is the model that we have today.
The big problem is that there’s no uniform way to transfer those retirement accounts. So, when you change jobs, what you are forced to do is go through this very arduous, old-school process that’s known as the rollover process, which is how you move your money from one retirement account to another, right? So, you move your money from a 401(k) to another 401(k) or to an individual retirement account like an IRA. There’s no uniformity to that. So, if you think about banking, you have ACH, right? If you think about brokerage accounts, you have ACATS. These are protocols that exist. There’s standardized ways to move your money. Nothing like that exists in the retirement account world.
And so, what you have is you have these 80 or so, what you call 401(k) providers that have different ways of making the consumer get their money and move it from A to B. That’s the problem we solve. So, we built technology that basically sits on top of all of that, and we can digitally find assets for people, and then we can move those assets in a way that’s much, much easier. So, forget about a process that’s typically paper-based, phone-based, checks, faxes in the mail, that’s what it is today. We make that much simpler and more digital?
Raju: Yeah. I love that. By the way, I did this once—I did this a few times, actually—and it was really painful.
Gaurav: Yep, mm-hm.
Raju: Like, it took a month for me to move, and everybody was just—there was no blockers. Like, everybody kind of wanted to do it, but it just took a month to get everybody in line, and all of the people on the phone and yadda, yadda, yadda. And I gather, without Capitalize, the vast majority still have that roadblock. But do you have a statistic that maybe you can—if you have it, great, if you don’t, no big deal—but like, what percentage of people leave jobs and leave their 401(k)s behind, and kind of either forget about them or know that they are there, but just don’t know what to do with them.
Gaurav: Yeah, we think there’s now almost 30 million left-behind 401(k)s—
Will: Wow.
Gaurav: With $1.65 trillion of assets in them. So that’s—
Will: Wow.
Gaurav: —that’s about 20, 25% of all of the money inside the 401(k) system is sitting there from people who have left jobs. And there’s another 3 or 4 million that get added each year because of the complexity in moving money.
Raju: That’s crazy.
Will: That’s insane. So Gaurav, what happens to that money, and is that money kind of providing the float for the industry overall? Like, wow.
Gaurav: You know, if it’s a small balance, right, it can actually be forced out or sent to you, right? But if it’s a balance that’s over $7,000 it sits there, right? It sits in the institution. And, yeah, look, they don’t necessarily want you to take it out, right? I don’t think they’re actively forcing you to keep it in, but, you know, it’s not like they have an economic incentive to invest a lot—
Raju: They being your previous employer? Or they being the fi—
Gaurav: Not the employer. The institutions that manage 401(k)s.
Raju: Exactly. Now, the employers really want you to get it out, right, because they still pay fees on that.
Gaurav: That’s exactly right. So, it’s a little known fact, but most employers are paying fees for you to keep your money there. And by the way, you know, we don’t think all 401(k) record keepers or providers are bad people, right? There are some that are perfectly good, but this is the dynamic, right? They’re not necessarily trying to make it easy for you to leave.
Raju: Yeah. Great.
Will: Wow.
Raju: Okay. Well, keep going. So, you help individuals find their 401(k)s—that’s, you know, kind of step one—and that’s great. And once they know that they are there, you help them move that to another institution. But you also help them, kind of select which one to go to a little bit? Or no?
Gaurav: That’s right. So, you know, look, we have, as you pointed out, we have two parts to our business. We have a cons—what we call a consumer marketplace, where people come to Capitalize, and we help them find their account, and then what we say is, we have a bunch of great partners, right? So, you know, so far, Schwab, Robinhood, Betterment and others, and they would love to offer you a retirement account. We can help you open up there, and then we’re going to leverage Capitalize’s technology to bring that money over into that new account.
So, for you, you know, you may have as a user three or four or five of these old 401(k)s. We’re going to help you consolidate it in one place, and therefore you can manage it, right? And you can know exactly what your money is doing for you. You can know exactly what fees you’re paying, and so the chances of that growing into a really healthy retirement account are much higher. So, that’s kind of what we call our consumer marketplace business.
Raju: Okay. We got listeners out there that are going to want to just jump on this.
Gaurav: Yep, sure.
Raju: Where can they go?
Gaurav: So, our website is hicapitalize.com that’s hicapitalize.com and, you know, I don’t know if you guys do [show notes 00:22:08] and things like that, but we’re happy to put a show note or something in there. But hicapitalize.com is the place to go.
Raju: H-I-C-A-P-T-I-L-A-I-Z—oh, I misspelled it. I mean, I wasn’t born here. I wasn’t born here.
Will: [laugh].
Gaurav: Hey, listen, I get it. I get it. You’re more numerate than are literate, Raju. I [crosstalk 00:22:25]—
Raju: I’m a numbers guy. I’m a numbers guy.
Will: Why don’t we let Gaurav spell it?
Gaurav: Hicapitalize, H-I-C-A-P-I-T-A-L-I-Z-E dot com. So—
Raju: In an Australian accent to boot.
Gaurav: You’re lucky that I didn’t say zed because down under, we say zed and not zee.
Will: [laugh].
Raju: Zed. Zed. Zed is the bad guy in Superman.
Gaurav: Yeah. Also a DJ, right?
Raju: Okay, fine. I like the DJ. I really—I love EDM, and so I do know Zed.
Gaurav: Oh, I didn’t know this about you, actually.
Raju: Oh, yeah. Yeah, yeah, yeah. I’m really big into—I like house music, so I don’t like sort of, like, you know, like aggressive techno, but like, deep house music—
Gaurav: [crosstalk 00:23:06] compare notes at some point.
Raju: Oh, yeah. We should go. Well, after this, after this podcast is done, we’ll go out [laugh]. Okay, second part of your business is focused on your business partners. Talk about that.
Gaurav: Yep, exactly. Which, you know, honestly, has accounted for more of our growth. So, more of our business is now B2B. We’ve still have terrific consumer marketplace business, but what has really grown in the past few years is our enterprise business. We are embedded natively in the applications and funding flows of some really great and large institutions.
So, for example, the SoFis, and the Robinhoods, and others of the world, they have customers that go and open up IRAs, right, Individual Retirement Accounts, and they want to help those customers bring over these held away 401(k), these lost 401(k)s. And so, what we did is we took everything that we built on the consumer side of our business, and we turned it into APIs. So, we offer an embedded rollover API that a lot of these institutions are now kind of including natively. So, it’s a very Plaid-like experience, right?
So, if folks are listening, I’m sure they’re familiar with Plaid. You know, if you have a bank account these days, you’ve probably interacted with Plaid, and it’s a very similar experience where we’re now sitting inside the onboarding, the sign-up, the funding experiences of a growing number of institutions. And they really love it because it’s helping them gather assets, right? Like, they want to be able to bring over the assets because AUM, for wealth management businesses, is really the name of the game. It’s also great for the individual because, again, they get to take advantage of the technology that we’ve built to solve this real pain point. So—
Raju: Awesome.
Gaurav: That business has really taken off for us.
Raju: Gaurav, that’s fantastic. We have a great product for consumers, and we’ve got an incredible product for our business partners. Anything either about those two products, or maybe a different angle of things that is on the horizon that you’re able to share?
Gaurav: Yeah. Yeah, absolutely. I’ll share a couple of things in how we think about the world and the roadmap. I’d say the first is, there is two-and-a-half trillion dollars of retirement assets that get transferred each year. And some of that is 401(k)s into IRAs, which we’ve talked about. Some of that is 401(k)s to 401(k)s. Some of it is IRAs to IRAs. Some is HSAs to HSAs. So, this is a big, big pool of money that gets moved each year.
Most of those transfers remain very old-school and antiquated, and so we’ve started with the first piece of that, which is 401(k) to IRA, but what we ultimately want to do is we want to power retirement account transfers of all kinds. And so, anytime you are signing up for a retirement account, like a 401(k) or an IRA, we want you to see a button that says ‘Transfer In,’ and that button makes it really easy for you to find and bring over your assets. It’s the first principle solution. It’s what you would want to see, right? And so, we think about extending what we’ve done today to cover more and more of the market.
I think the other thing we think about is, how do we—right now, we serve consumers, we serve financial institutions, and sort of what we call enterprises, right? There are other folks that are implicated by the pain here, right, that suffer from the status quo. And so, I’ll give you a couple: financial advisors, right? Financial advisors will often onboard a client, and they’ll have to do this exact thing: they’ll have to help go track down where the money is and bring it over, and right now, they go through a very manual process. So, we’re building a version of Capitalize for advisors where we’re very excited to release it.
And then secondly, we also think about the pain point of employers, right, and again, how we estimated there’s only [unintelligible 00:27:01]—there’s hundreds of millions of dollars of fees each year that get paid by employers for accounts for employees who are no longer there. And so, number one is helping digitize more and more of those transfers so it’s really seamless. And then second, serving other constituencies in this market so that, you know, we’re solving the problem really holistically.
Raju: I love it. I love it. I love it. I’m so glad I invested [laugh].
Will: So Gaurav, I’ve got to ask, for your financial institution partners, you’re trying to get what is essentially an easy button on that enrollment page. Are they willing to compensate you for helping to bring those assets? Is there, like, a bounty for that?
Gaurav: Very much. Yep, so exactly. So, the way the model works is they pay us for transfers in, and they’re very excited for that because they know that the success rate of someone trying to do it on their own is very low. So, we think it’s roughly 25%, right. So, three quarters of people who try give up. Our success rate is obviously many, many multiples of that. So, they know that it’s worth it to them because they would never get the assets otherwise. And again, these assets, are really sticky, retirement assets and accounts don’t churn very much, so the value prop for them is extremely clear.
Raju: Okay. So, let’s appreciate the details on Capitalize. Just one last question, and then we’ll move to this Gatling gun section. Any hard, easy, something lessons that you’ve learned through the process of building this business, any advice for young entrepreneurs that you’re willing to share? A lot of folks that listen to this podcast are entrepreneurs, and some of them are actually thinking about it, you know, or just want to hear some advice from other successful entrepreneurs.
Gaurav: Yeah, happy to share. And, you know, I’ll caveat this by saying, compared to folks you’ve had on the show, I’m probably midway through my journey, rather than at the end of the journey or at the beginning. But very happy to share lessons learned and advice that I give. Look, I think the first one is you want to fall in love with the problem, right? Starting a company may seem glamorous, but its success is a lot of hard work, a lot of grit, a lot of grinding through incremental progress day by day. And you have setbacks. You have high-highs, and you have setbacks.
And so, if you’re not animated by the problem, if you don’t really love the problem, I think your ability to endure and get through it is lower. So, I think the first thing I always tell people is, don’t start something on a whim. You really want to make sure you find the problem fascinating, you think it’s worth solving because that’s going to carry you really far. I think the second thing is something I alluded to earlier, which is, treat things as hypotheses, right? They’re falsifiable, you can validate them or invalidate them.
And I think that’s really important. You know, when I started the company, I had this one-page where—I still have it, right—and it basically was like, “Here are all the leaps of faith, all the hypotheses that I believe to be true.” And I’m testing them constantly, and I’m trying to move them from unproven to partly proven to proven. And I think if you do that, to your point earlier, Raju, about honesty, it kind of guides you to where you’re getting it right, where you’re getting it wrong, and where you may need the course-correct. So, I think number two is, you know, treat things like things that you’re going to try and prove, right?
I think two last points, and then I’ll kind of move on here. The third one, I think, is think about things through the lens of learning, right? If you are really tied to the milestones and the metrics, you’re going to have high-highs and low-lows, and I think what you want to do is try to emotionally calibrate yourself. The way I like to do that is, I like to think about not kind of, what goals did we score today, but like, what did I learn, right, and what did we get better at as an organization? And then the last one is, you got to have fun, you know? Like, you got to find ways. Life’s too short. Yes, starting a company is good, important work. I think founders move us forward, and the people who join early-stage companies really move us forward, you know, collectively, which is terrific, but you got to have fun doing it. And so, I think you got to find the joy and make sure you don’t, you know, drive yourself crazy.
Raju: Zed concerts.
Gaurav: That’s right.
Raju: [crosstalk 00:31:19] Zed concerts. Yeah.
Will: [laugh].
Gaurav: EDM, whatever it ta—you know, whatever it—
Raju: What is your favorite EDM?
Gaurav: You know, listen, I’m not going to sta—no points for originality here, but I’m still a Calvin Harris fan. I’m still a Calvin Harris fan. So, if he’s listening, then send me tickets to his next gig.
Raju: Okay fine, I’ll… all right. And if it’s tickets, it’s the two of you going, and if [unintelligible 00:31:44] happens to, like, give me free tickets—
Gaurav: There we go [crosstalk 00:31:47]—
Raju: —you know, you’re coming. Okay, fine. All right, now we’re going to move to the more free-form—
Gaurav: Yes, the Gatling gun.
Raju: —side of things, the Gatling gun section. So, I’ll just ask you a bunch of questions. Some of them are like, just, you know, open-ended, some of them are, like, multiple choice, so just feel free to answer however you like. So, first question, I feel that there’s some naughty connotations to the expression ‘down under.’ Am I right?
Gaurav: No comment. No comment on that. I’m going to skirt that one.
Will: [laugh].
Raju: [laugh]. Okay, fine. I don’t know. I just, I feel like—I don’t know.
Gaurav: It’s very literal. It is geographically, the land down under. So…
Raju: Okay all right, I’ll give you that. All right. Australia is home to, like, what, 99% of the world’s deadliest creatures.
Gaurav: We love them, yah.
Raju: Or like—yeah, okay, so are people there more anxious or more carefree because they’re just happy to be alive?
Gaurav: I—[laugh]—definitely, definitely more carefree. I—like causality, I don’t know, but I think certainly more carefree.
Raju: Okay. I’ve been to Australia many times. I love Australia, in fact. I do. It is—Sydney is one of my favorite cities in the world.
Gaurav: I appreciate it, yeah. It’s a terrific city. Really high quality of life. Yeah.
Raju: Really high quality life. Okay. Have you ever met Crocodile Dundee?
Gaurav: Mmm. I haven’t. I’m disappointed, but I haven’t. I’m sensing a theme to the—at least the—
Raju: Well, it’s first—
Will: Are you? Are you sensing it?
Gaurav: Yeah, yeah, [crosstalk 00:33:19].
Raju: I’m you literally trying—like, you’re the first Australian that’s been on this podcast, so I have to go very heavy.
Gaurav: The pressure is high. [unintelligible 00:33:28] yeah, go.
Raju: Favorite Australian actor?
Will: Only because Nicole Kidman turned us down. But she’s going to want to be on after this.
Raju: Speaking of Nicole—
Gaurav: Speaking of favorite actors—
Raju: Yeah, what’s your favorite Australian actor?
Gaurav: Listen, I got to say Hugh Jackman. I mean, look, this is a long list, but I think Hugh Jackman is such a talented, multi-dimensional performer. He can do it all. He’s like, he’s irritatingly handsome, he’s irritatingly nice, he’s thoughtful, he’s ta—
Raju: I mean, said the same thing about you, Gaurav.
Gaurav: Oh, did he? Okay.
Raju: Yeah. Yeah, yeah, yeah [laugh].
Will: [laugh].
Gaurav: He’s just a hard person not to like.
Raju: Yeah, yeah. I did some research on this one, and I found out, like, how many amazing actors come from Australia. Hugh Jackman, Nicole Kidman, Cate Blanchett, Keith Ledger, Russell Crowe Margot Robbie, Chris Hemsworth.
Gaurav: That’s right.
Raju: You literally have the top Avenger and the top X-Men.
Gaurav: That’s right.
Will: [laugh].
Raju: The top ones. That’s nuts.
Gaurav: Yeah, you’re welcome. America. You’re welcome.
Raju: Yeah. Yeah. Yeah. Yeah. Favorite Australian band?
Gaurav: Oh, there’s been a—so there’s a band called Silverchair growing up, which was great, and then Jet, you know, which hasn’t [unintelligible 00:34:46], but they’re good too. But I’m dating myself, so these are many years ago.
Raju: Okay. I was thinking AC/DC, Men at Work.
Gaurav: Yeah, also good. Also good, yeah.
Raju: And speaking of—
Will: [unintelligible 00:34:56]. Yeah.
Raju: Yeah.
Gaurav: You know [crosstalk 00:34:58]—
Raju: Bee Gees. Bee Gees.
Gaurav: [unintelligible 00:34:59]
Will: Bee Gees, yeah.
Raju: INXS. INXS.
Will: Bee Gees are foundational. Yeah.
Gaurav: Yeah.
Raju: I’ve read this—I heard the song that Men at Work, and this guy mentions this Vegemite sandwich. What actually is a Vegemite sandwich?
Gaurav: You know what, Vegemite is a great invention. I’m making my son eat it every Wednesday morning, Actually. Every Wednesday morning we go to Bluestone Lane, which is a great Australian Cafe, and we have a good Australian breakfast. It Includes Vegemite, which is a very salty spread that you grow up eating in Sydney. So, that’s what a Vegemite sandwich is.
Raju: Okay. Okay, salty spread. It doesn’t sound the way it actually—
Gaurav: No it tastes exactly the way—it’s a salty spread. I’m not going to—yeah, exactly.
Raju: Last Australia question.
Gaurav: Okay, good, yeah.
Will: [laugh].
Raju: Let’s be truthful. Is it a country or a continent? Like—
Gaurav: Oh.
Raju: Yeah. I mean—
Gaurav: Yea. Listen, I think technically both. I think we’re going to push for status as a continent, yeah?
Raju: Man—
Gaurav: I don’t know we’re winning that debate, but you know, I got to toe the party line. I got to say—
Raju: Yeah, yeah, you should toe it. I actually love it as a continent because it’s my favorite Risk strategy. Just lock down on Australia.
Gaurav: I see, okay, good. Now, I know your approach every time.
Raju: Oh, I shouldn’t have given that away. I do play Risk, you know, occasionally.
Gaurav: Is this—like, did you grow up playing this, or is this an adult… adult—
Raju: No, no, no, I grew up playing it. I mean, we didn’t have a lot—like, I think that was like, one of two board games that we had at home, so I played it a lot. It takes a long time. Okay, just a random question, year that you’ll be able to invest in crypto in your 401(k)?
Gaurav: You can do it in your IRA. So, if you want to do that, we have some partners, and you can do it through the Capitalize platform. You can find a partner that allows you to do it. So, you can certainly do in your IRA. I think the 401(k) is hard. You know, maybe this change in administration makes that easier, but IRAs for sure.
Raju: Fantastic. Okay, what do you think the fate of Social Security is?
Gaurav: Oh, man, I listen. I think—I’m an optimist, and I think we’re going to get to a stable place in the next 20 years. I think it will take some reform and re-under—like, a new social contract on what it means to get social security, and how much that is. I’m an optimist, and I think we’re going to get there. I think it’s going to be a lot of hard work before we do.
Raju: Okay.
Will: Let’s stay on that for a second because pension reform is, I think, a great topic worldwide, particularly when pension assets are so poorly managed as they are in this country. To have a new social contract, you kind of have to break the existing one. How do you think that’s going to happen [laugh]? Who’s going to own that?
Gaurav: Yeah. Look, I think it’s already, if you look at retirement at a high level in pensions, part of that has already been broken, right? We started in the early-20th century with pensions, right, where people will go to General Motors, they’d worked there for 50 years, and out with a pension. That got broken in the ’80s, right? Now, we have 401(k)s, and they sort of work. And that piece of it, I think, will remain.
And then you have the social security piece. And look, I think, you know, we haven’t done it in the US, but you can look at other countries where they have increased the age at which you can take a benefit like that, they’ve reduced the amount, and reduced indexing. And so, you know, I think it’ll happen, like most things, it’ll happen sort of stealthily over time rather than a big bang, but I do think we’re going to need to figure it out. And again, I’m an optimist. I think at some point we’ll have the appetite as a country to re-underwrite it and restabilize it.
Raju: Okay. Last question. What’s your favorite 401(k) joke?
Gaurav: Oh… I mean, we talk about 401(k)-9 a lot. Like, who’s your favorite 401(k)-9. Every dog is a 401(k)-9.
Will: [laugh].
Raju: I have one. I have one.
Gaurav: Oh yeah, you have one. What’s yours?
Raju: So, one coworker says to the other coworker, “Have you signed up for the company’s 401(k)?” And the other guy says, “I’d never be able to run that far.”
Will: [laugh].
Gaurav: [laugh]. That’s pretty good.
Raju: Dad joke. Dad joke. Dad joke.
Gaurav: You know what? I may steal that. I may steal it.
Raju: Steal it. Steal it. Steal it. Steal it. Anyway, you’ve been wonderful. Really, really enjoyed having you on.
Will: You’ve been fantastic, Gaurav.
Raju: Yeah.
Will: So, glad we have you in the portfolio. Thanks to you for coming on the show.
Gaurav: Of course.
Will: This has been terrific.
Gaurav: Thank you. Great to chat.
Raju: Yeah, really, really terrific. And you know, anyway, enjoy the day. I know you have a newborn—relatively newborn—but enjoy the nights and enjoy the days.
Gaurav: Well, I really appreciate it. Thank you for thank you guys for having me on. Really fun conversation. That went by fast, and I really enjoy the show, and keep cranking them out.
Raju: All right.
Will: Thank you.
Gaurav: Thanks [crosstalk 00:40:05].
Thank you for listening to RRE POV. You can keep up with the latest on the podcast at @RRE on X or rre.com, and on Apple Podcasts, Spotify, Google Podcasts, or wherever fine podcasts are distributed. We’ll see you next time.