Keith Rabois on the 3 lessons he learned from Max Levchin

The first lesson Keith learned from Max was to model the behavior you want your employees to emulate.

“Even to this day… there was a problem about 3 or 4 years ago… Max literally slept in the office with the team for 3 days until they figured out what was driving it. It was related to fraud so it was very important to figure out for a payments company, but still — after all of his success — he’s still willing to sleep in the office when there’s a problem. And that of course cascades through the entire company. So the first lesson is lead by example.”

The second lesson was the importance of physical fitness and health even when you’re extremely busy:

“Max every day at PayPal would go for a run… Even when you’re the CTO of the company, even when everything is breaking, you still need time to keep in shape. It affects your brain and decision making.”

The third lesson is using machines and people in an interactive loop — an approach he pioneered at PayPal.

PayPal was losing $10M+ to credit card fraud every month. The fraudster’s adaptive evasions fooled their automatic detection algorithms, but the team found that they couldn’t fool human analysts as easily. So Max rewrote the software to take a hybrid approach: the computer would flag the most suspicious transactions, and human operators would make the final judgment on their legitimacy. This “man-machine symbiosis” kept PayPal in business and gave Peter Thiel the idea for Palantir.

Full video: Khosla Ventures “Lessons from Five Bosses | Keith Rabois & Samir Kaul“ (May 2023)