Invest Like the Best with Patrick O'Shaughnessy

Josh Kushner - Concentration and Conviction - [Invest Like the Best, EP.459]

February 18, 2026

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  • Thrive Capital's success is fundamentally driven by a highly concentrated investment strategy and an intense commitment to being the most meaningful partner to a small number of portfolio companies. 
  • The culture at Thrive prioritizes independent thought, humility, and a drive stemming from gratitude or a sense of proving oneself, while guarding against the distortion caused by external praise. 
  • Thrive views itself as an 'enabling technology' (the Medici) for founders (the artists), and is now building its own internal technology capabilities through its 'Holdings' company to disrupt from the inside-out. 

Segments

Thrive Culture and Ambition
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(00:03:45)
  • Key Takeaway: Thrive actively guards against the lure of praise, maintaining an entrepreneurial culture that ignores external noise to focus on independent thought and continuous improvement.
  • Summary: External validation, whether criticism or praise, can distort disciplined minds, so Thrive guards against both. The firm’s ambition centers on having the best culture and process, not merely scaling assets under management. Insecurity is recognized as a driver of innovation, but the ultimate goal must transition to passion and joy to avoid a never-winning game.
Small Team Philosophy
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(00:12:21)
  • Key Takeaway: Thrive maintains a small organizational size by hiring 10X people across all functions who share responsibility and authorship for firm decisions.
  • Summary: The power of small teams relies on mutual respect among members, ensuring conversations focus on reaching the right answer. Thrive believes every person, even outside the investment team, must be the best in their role and have transparency and autonomy. This structure allows the firm to remain small while ensuring all functions contribute meaningfully to decision-making.
Concentration and Conviction in Deals
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(00:14:34)
  • Key Takeaway: Thrive’s differentiation comes from making large, convicted bets early, driven by a bottom-up service orientation to the opportunity, not a predetermined output goal.
  • Summary: The firm’s strategy is a natural consequence of intuiting where the world is moving, leading to unique positions like leading Stripe’s $50 billion round or OpenAI’s early funding. Concentration places a burden on the team to be extremely disciplined and act as truth-tellers in the foxhole for founders. Stan Druckenmiller advised that conviction investing is right, provided the investor picks correctly.
Iconic Early Investments
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(00:16:21)
  • Key Takeaway: The GitHub investment, which required buying out early founders and involved significant internal turmoil, solidified Thrive’s commitment to deep involvement and concentration.
  • Summary: Thrive invested $20 million in GitHub in 2014 and later bought out founders seeking liquidity, owning about 10% of the company. The Instagram investment doubled money in days, prompting Jon Winkelried to deliver the lesson: “never believe your own bullshit.” This experience reinforced the need for intellectual honesty and self-awareness in predicting the future.
Enabling Artists and Isomorphic
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(00:25:43)
  • Key Takeaway: Thrive views its role as the Medici enabling creators (founders/artists), exemplified by creating the Isomorphic deal to support Demis Hassabis’s mission-driven work.
  • Summary: The firm’s heroes are its founders, and its job is to enable them to create masterpieces, similar to how A24 supports directors. Thrive partnered with Demis Hassabis to spin out Isomorphic from DeepMind, viewing the goal of curing disease as the most important endeavor to support. This reflects the input-driven focus on supporting the creators in the ecosystem.
OpenAI Realization and Power Dynamics
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(00:28:19)
  • Key Takeaway: The ChatGPT preview provided an undeniable realization that OpenAI possessed the rare combination of research, talent, compute, and product distribution to change the world.
  • Summary: Thrive’s investment thesis centers on category-defining products and people, believing that the value accrues disproportionately to the leaders in a paradigm shift. Josh Kushner saw the product’s potential late one night and realized it was the most important prize worth winning, despite industry skepticism about high private valuations. Working closely with OpenAI exposed him to the intense perception of power and how people act when the ‘ring’ is present.
AI Landscape and Investment Focus
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(00:39:15)
  • Key Takeaway: Thrive focuses on three AI investment categories: AI-native businesses (labs and domain-specific models), essential infrastructure, and internal transformation via applied AI in portfolio holdings.
  • Summary: The AI paradigm shift is viewed as democratizing intelligence, leading to massive enterprise value creation, though frothiness exists in the application layer. Thrive avoids investments where the outcome is uncertain, preferring to focus on foundational labs, domain-specific models (like robotics/life sciences), and infrastructure powering agentic commerce. The firm believes future disruption will occur from the inside-out, driven by proprietary data and internal expertise.
Holdings: Internal Disruption
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(00:44:53)
  • Key Takeaway: Thrive created a permanent capital vehicle, Holdings, to buy companies and transform them using applied AI internally, aiming to create a defensible mode like its portfolio companies.
  • Summary: Holdings addresses the insecurity that Thrive looks different from the disruptive companies it backs, aiming to create its own defensible product moat. The initiative began after pitching private equity firms on using OpenAI’s API without success, leading Kareem to suggest they do it themselves. The goal is to transform these acquired companies into product and technology entities, achieving a differentiated cost of capital at scale.
Values, Loyalty, and Perspective
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(00:51:51)
  • Key Takeaway: Thrive’s core value is unwavering loyalty, refusing to invest in competitive businesses, believing one’s word and ethics are more important than any single trade.
  • Summary: Josh Kushner emphasizes that kindness without toughness falters, and toughness without kindness corrodes, guiding the firm’s interactions. He operates on a trust-by-default basis but immediately cuts ties if trust is broken. His grandmother’s survival of the Holocaust provides essential perspective, reminding him that no professional difficulty compares to her experience, and her accomplishments are unmatched.