# Kalshi's Tarek Mansour: Chaos by Design Markdown copy of https://realalpha.app/v/l_Boz3KRtBQ/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy. Tarek Mansour says Kalshi stayed committed to building a regulated exchange, even when that meant betting the company on a lawsuit against its regulator. - Show: Training Data - Hosts: [Sonya Huang](https://realalpha.app/people/sonya-huang/) & [Pat Grady](https://realalpha.app/people/pat-grady/) - Guest: [Tarek Mansour](https://realalpha.app/people/tarek-mansour/) is cofounder of Kalshi. - Published: Jul 9, 2026 - Length: 1 h 4 m ## The best minutes - [42:48](https://realalpha.app/v/l_Boz3KRtBQ/?t=2568) [Kalshi sued its regulator because the upside outweighed the risk](https://realalpha.app/s/kalshi-sued-its-regulator-because-the-upside-outweighed-the/) (5 min) - [20:36](https://realalpha.app/v/l_Boz3KRtBQ/?t=1236) [Founders should own the company’s biggest problem](https://realalpha.app/s/founders-should-own-the-companys-biggest-problem/) (3 min) - [35:16](https://realalpha.app/v/l_Boz3KRtBQ/?t=2116) [Marketing works best when it meets the moment](https://realalpha.app/s/marketing-works-best-when-it-meets-the-moment/) (3 min) ## Also worth watching - [51:35](https://realalpha.app/v/l_Boz3KRtBQ/?t=3095) [Kalshi uses account limits to reduce risky trading](https://realalpha.app/s/kalshi-uses-account-limits-to-reduce-risky-trading/) (8 min) - [16:46](https://realalpha.app/v/l_Boz3KRtBQ/?t=1006) [Kalshi shifts its focus as customer demand changes](https://realalpha.app/s/kalshi-shifts-its-focus-as-customer-demand-changes/) (3 min) - [24:37](https://realalpha.app/v/l_Boz3KRtBQ/?t=1477) [Kalshi prioritized regulation before broad adoption](https://realalpha.app/s/kalshi-prioritized-regulation-before-broad-adoption/) (2 min) - [28:29](https://realalpha.app/v/l_Boz3KRtBQ/?t=1709) [Decide whether the idea is worth the opportunity cost](https://realalpha.app/s/decide-whether-the-idea-is-worth-the-opportunity-cost/) (3 min) Skip the four-minute childhood and family background, the CEO role-model discussion, and the work-schedule and office-hours segment. ## Full analysis: Tarek Mansour says broker revenue reached 80% before a reset - Brokers rose to 80% of Kalshi revenue, then later represented 10% of volume. - That supports demand-led adaptation, but it does not prove every shift worked. - Founders should track customer mix, regulatory exposure and user safeguards together. Its 7 sections, what it means for you and what to watch are on [the page](https://realalpha.app/v/l_Boz3KRtBQ/#analysis), free with an account: - [18:57](https://realalpha.app/v/l_Boz3KRtBQ/?t=1137) Kalshi changed priorities when channel demand shifted - [20:39](https://realalpha.app/v/l_Boz3KRtBQ/?t=1239) Founders should keep the biggest constraint close - [25:21](https://realalpha.app/v/l_Boz3KRtBQ/?t=1521) Kalshi treated regulation as a product foundation - [47:36](https://realalpha.app/v/l_Boz3KRtBQ/?t=2856) The lawsuit was a high-upside bet, not proof - [36:11](https://realalpha.app/v/l_Boz3KRtBQ/?t=2171) Kalshi timed marketing around moments of attention - [29:36](https://realalpha.app/v/l_Boz3KRtBQ/?t=1776) Mansour says persistence must serve the idea - [55:03](https://realalpha.app/v/l_Boz3KRtBQ/?t=3303) Kalshi’s safeguards need evidence beyond incentives ## Summary Tarek Mansour cofounded Kalshi with Luana Lopes Lara to build an exchange for a broad range of markets. He says the company held to that vision through years of regulatory delays, then sued the CFTC over election markets and won shortly before the 2024 election. Mansour says he and Luana Lopes Lara divide strategic, regulatory and marketing work from day-to-day operations, and that their deliberate disagreements help balance innovation with regulatory risk. He argues that Kalshi's loose structure lets it reorient quickly, while founders should personally own the company's biggest problems. Kalshi stayed with its regulated-exchange vision through years of setbacks and sued the CFTC after repeated election-market delays, treating the case as an asymmetric bet. Mansour advises founders to keep going only when the idea matters to them, not because they expect an easy payoff; he also discusses marketing timing and Kalshi's safeguards against excessive trading. ### Minute by minute - [1:17](https://realalpha.app/v/l_Boz3KRtBQ/?t=77) **Disagreement balances risk and innovation.** Mansour says he handles high-level strategy, regulatory work, fundraising and detailed marketing, while Luana runs the day-to-day company. They often argue opposite sides by design, he says, to balance innovation against regulatory risk and challenge each other without the incentives employees may have. - [6:41](https://realalpha.app/v/l_Boz3KRtBQ/?t=401) **Volatility shaped his risk instincts.** Mansour connects his risk-focused outlook to growing up in Lebanon with a single mother who was intensely protective and pushed her children to succeed. He says that experience made him quick to imagine how things could go wrong, while also teaching him to keep looking for a solution. - [10:22](https://realalpha.app/v/l_Boz3KRtBQ/?t=622) **Chaos helps Kalshi adapt.** Mansour says he and Luana make up their own operating approach rather than follow a standard CEO playbook. He describes Kalshi's low-hierarchy structure as chaotic, but says it helps the company shift toward new problems and opportunities without friction. - [16:58](https://realalpha.app/v/l_Boz3KRtBQ/?t=1018) **Kalshi resets around its biggest challenge.** Mansour says the company organizes its priorities around the most important current challenge, rather than relying on a fixed plan. After the election, Kalshi focused on cross-selling users; broker demand brought more liquidity, but brokers later accounted for 80% of revenue, prompting a renewed push toward direct customers. He says brokers are now about 10% of volume. - [20:36](https://realalpha.app/v/l_Boz3KRtBQ/?t=1236) **Founders must own the biggest risks.** Mansour argues that a founder should personally face the company's hardest problems rather than hand them off. He compares a company to a fast-moving ship with a leak and says Kalshi's current challenge is distinguishing regulated U.S. markets from offshore platforms and addressing insider-trading concerns. He says he spends about 80% of his time on that work. - [23:18](https://realalpha.app/v/l_Boz3KRtBQ/?t=1398) **Regulatory groundwork supported Kalshi's growth.** Mansour says competition is rarely a company-killer in a large market and reports that Kalshi has 95% of U.S. prediction-market share. He says Kalshi chose to build within financial regulation rather than launch without a license, and that its growth accelerated after it could offer election markets and execute on product and growth. - [26:53](https://realalpha.app/v/l_Boz3KRtBQ/?t=1613) **Keep going only for the idea.** Mansour says Kalshi never pivoted from its goal of building an exchange for many kinds of markets, even through years of regulatory setbacks. He advises founders to ask why they are continuing: persistence makes sense when the idea itself matters, but not just for an imagined payoff. He says entrepreneurship brings continuing stress and sacrifice rather than a permanent oasis. - [31:10](https://realalpha.app/v/l_Boz3KRtBQ/?t=1870) **Founders set their own pace.** Mansour says he is usually at the office from 8 a.m. until 10 p.m. and often works there on weekends, but does not require employees to match his schedule. He says Kalshi has grown to about 150 people and has fewer than 10 support staff for millions of customers, with automation helping the team scale. - [34:27](https://realalpha.app/v/l_Boz3KRtBQ/?t=2067) **Marketing depends on timing.** Mansour says marketing needs precise execution and should meet people at the moment they are paying attention. He describes live election odds on billboards, refined through about 20 iterations, and a Timothée Chalamet commercial released 12 hours after Knicks news broke. He says Kalshi also timed partnerships around major moments for Messi and Giannis. - [40:23](https://realalpha.app/v/l_Boz3KRtBQ/?t=2423) **Kalshi made an asymmetric legal bet.** Mansour says Kalshi began seeking approval for election markets in 2021, but the CFTC delayed its decision until after the 2022 midterms; the company then lost employees and made layoffs. After another rejection in 2023, Luana pushed to sue despite warnings from board members that the regulator could cripple the company. Mansour saw a low-probability but high-upside bet, and says a good expected outcome can still lose on one try. - [49:04](https://realalpha.app/v/l_Boz3KRtBQ/?t=2944) **The ruling created a narrow launch window.** Mansour says he learned by phone that Kalshi had won, and that employees celebrated by throwing chairs and damaging the office. The ruling came three and a half weeks before the 2024 election. He says the launch did not take off immediately, but the team worked intensely to build momentum and then saw growth compound. - [51:35](https://realalpha.app/v/l_Boz3KRtBQ/?t=3095) **Kalshi says safeguards can limit harm.** Mansour distinguishes Kalshi's market model from gambling businesses: he says Kalshi takes a 1% fee rather than earning revenue from customer losses, and wants informed trading to improve liquidity and forecasts. He says the company adds throttling and verification for 18-to-20-year-olds and uses a parent portal to help prevent minors from using their parents' IDs. - [59:10](https://realalpha.app/v/l_Boz3KRtBQ/?t=3550) **A company should reflect its founder.** Mansour advises aspiring founders to ask why they want to start a company, since founders are not their own bosses and the work brings little freedom. He says it is hard to build or market a product that does not reflect who the founder is, and argues that the company's character tends to mirror its founder. ## Transcript Training Data, hosted by Sonya Huang and Pat Grady, with Tarek Mansour. Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there. [0:00](https://realalpha.app/v/l_Boz3KRtBQ/?t=0) The thing that was unique about us is we never pivoted. It was always Kalshi. I mean, Kalshi is everything in Arabic. We always wanted to build the everything exchange, the exchange for all these different assets. And we didn't build Kalshi to build a company. We built a company to build Kalshi. It's a bit different. We were dragged by the idea. I wasn't the type that wanted to be an entrepreneur. I think if you re-roll the dice multiple times, I'd probably just be a trader or risk manager. I would not be an entrepreneur. But the idea was so gliding in front of us that we just had to do it. We felt like we had to do it. [0:29](https://realalpha.app/v/l_Boz3KRtBQ/?t=29) And so the whole point of doing this whole thing is the idea. Hey, everybody. Today we have Tarek on from Kalshi. He is a gem. This is a really good episode. they walked through the desert for many many years in this company and went sideways then they made a very risky bet to sue the federal government and won and this thing has ripped ever since it's growing you know similar rates to open ai and anthropic but a few years behind i think you're gonna like it i'll be back at the end for my takeaways we just met for the first time a couple ago at david salman's house and it was a ceo dinner and you had some very unusual ideas about ceoing this is why i wanted to have you on the pod yeah and so i want to get into those let's just start with your co-founder yeah it sounded like it's a semi co-ceo relationship how do you two run the company how do you split it up yeah it's interesting you know we've over the years who have constantly been asked this question and we never really had a very clean answer to this and we always thought it was sort of like a weakness and our perspective on that has changed. [1:55](https://realalpha.app/v/l_Boz3KRtBQ/?t=115) I mean, dramatically, I actually think whatever model works for us, works for us. Great, you know, and if you figure that out, then, you know, and, you know, the best way to describe it is that I think, like, I operate at the very high level strategy, make sure that we're going in the right direction, where's the world heading, where are rights to win, And just thinking, a lot of thinking continuously. And then I'm very, very low in the details. Okay, you're high and low. Yeah, extremely high. Head in the sky, feet in the ground. Yeah. Okay. But very, very low. I'm talking like... Coding. Yeah, and more specifically, like marketing and the copy and the details and everything around how we're marketing something, how we're talking about the product, all these little things that the end consumer, whether it's someone looking at a billboard or someone who's in the product, is going to experience. What are they going to feel? And everything else that is actually running the company is Luana. That's basically, I think one of the best ways to describe it. And then I do the external stuff, the regulatory, the policy, the fundraising, all the other external aspects of the job that tie to marketing and sales. [2:59](https://realalpha.app/v/l_Boz3KRtBQ/?t=179) but the day-to-day running of the company like making sure that the company is actually run is luana how do you disagree you must disagree about stuff disagree a lot like all the time so how does that play out i actually think we kind of disagree by design like we have this thing this dynamic over time it's become a thing where like we essentially will always take the opposite side of the argument are you a contrarian i'm the guy in the room that will be sort of the negative like everybody's pumped about a plan i'm like oh here's how it's going to fail and how in all the issues okay i have you know but but we tend to sort of just like disagree with each other often and i think also like you know again it's people like oh you know how you disagree and disagreement like continuous disagreement is an anti-pattern but for us it ended up being a pattern because we're coming this we're this very complicated company that has this constant continuous delicate balancing between how much risk to take on the regulatory front and like you know innovation regulatory and you have to always balance those two those two things out and you see now in ai and safety and innovation all that and And like that sort of debate is a continuous force to drive us to the middle. [4:00](https://realalpha.app/v/l_Boz3KRtBQ/?t=240) We end up getting, you know, not always the right answer, but we're not too far from the right answer and we never oscillate between the two extremes. And I think that's one of the powers of having like two equally powerful, like two co-founders in an organization, because if you're the only one, you know, anyone, like anyone that reports you or whatever, like anyone that you hire that is not a founder, it's inevitable that they won't always tell you the truth. It's inevitable. Like, no matter what culture you build, etc., like, there's different incentive structure than someone who's a founder that owns as much equity as you, etc. And so you can stray, right? And here, it's very hard for either of us to stray. [4:34](https://realalpha.app/v/l_Boz3KRtBQ/?t=274) So I talked to Luana to prepare for the interview. It sounds like you're kind of the more conservative of the two. Yeah. And maybe you're on the regulatory side and she's on the innovation side. Is that the way it sort of plays out? More often than not, yeah. Luana is very faith-based, like, optimist. Sometimes I would say, like, super irrationally optimistic. Like, she sometimes doesn't really do the math on how something is going to work out. Like, on why it's going to work out. And that's continuously happened at Kalshi. And that used to, I mean, for years, it frustrated me. I was like, this really, like, it doesn't make any sense. And I'm the other side. I'm like, I'm a risk manager. I have a paranoid demure, which is also usually an anti-parent for a founder. I think about risk and expected values. And like, I think probabilistically about the world. And here's all the things that could go wrong. [5:28](https://realalpha.app/v/l_Boz3KRtBQ/?t=328) and i think that sort of that tension has led to uh all the decisions that we've made over time but it's interesting because you know like luana's uh approach to things and now i now believe that given enough time horizon is going to end up being true no matter how rational it sounds okay it's kind of it's kind of amazing but i think my side is the thing that like for right you know for a company that has to get regulatory right you have to make sure that like you uh you're doing things the right way like i'm kind of that forcing function in the company and again so i think we land somewhere in the middle where we've managed to achieve the results we've achieved i'm actually very bad at a lot of things it's actually shocking like if you see my day-to-day because you're obsessive you're very good at exactly things exactly you're a lot of founders are obsessed yeah but i'm kind of procrastinator like i'm so disorganized like if like people that work around me ask them it's just like such a shitshow but like you wanna like orchestrates everything she's organized very and like she drops but like i'm like the opposite of what you imagine for an operator but i can get so obsessed with certain things that i want to get [6:31](https://realalpha.app/v/l_Boz3KRtBQ/?t=391) good at that i can get good at pretty fast and i like get good so i don't think i'm a good marketer i just like obsessed about it for long enough that i i work with my co-founder he's very obsessive and goes very deep down a rabbit hole and you can't get him out of that rabbit hole you've had a long strange trip growing up in beirut yeah uh certainly an unusual childhood is the risk a version sort of rooted in growing up in such an unusual place for sure i mean most most things right that end up sticking with you are really how you grew up um this definitely applies to i mean so i grew up with a single mom and i grew up in lebanon and in lebanon you know it's it's not a i feel like oftentimes the headline make it sound like a sounds like a constant war zone if you read the new york times yeah it's not it's actually more of a volatile country yeah like the word is volatility. It's a lot of ups, a lot of downs. You can have a lot of fun, great life. And then all of a sudden you're like, you know, running from a, so, so the mix of those two, my mom was paranoid. She, she, she would, she was always afraid. We would sort of take a lot of issues that would be thrown at. [7:30](https://realalpha.app/v/l_Boz3KRtBQ/?t=450) So the extreme, and we would carry them as like, and I was really young, and I'm the eldest child. We're two brothers. And that doesn't leave you. So my brain is wired to think about all the ways that something is going to, you know, go wrong, right? Like if I get on a hot air balloon, I can like list on a flight, like any, yeah, on a flight to like, I can list you immediately all the 20 ways this thing is going to go south, right? Okay. But it's important for our company, we're a company that, you know, that has financial risk involved regulatory, I mean, all these different things, but that has helped us over time, really, become very hyper attuned to what exactly is our risk in a variety of different ways and where we can take risk and where we can okay i've heard you on other pods bring your mom up just can you just give us some more paragraphs on her oh it's interesting like riff on your mom she's very i mean she's like she's definitely a tiger mom like in that you know so tiger mom very intense like very very intense my you are too yeah i'm very intense too yeah but yeah my way or the highway uh we're like uncom completely uncompromising completely and then it was the sort of thing [8:33](https://realalpha.app/v/l_Boz3KRtBQ/?t=513) where like so what happened is i think she had to basically sacrifice a lot of her life to to because my my dad left us at age six kind of and she had to sacrifice a lot of like her career everything she was wanted to do to basically make sure that we're okay and she wanted us to have the best life we could and come back you know come back to america so i was born in california went to lebanon and she wants to come back and get to the top school etc and so what happened is i think like a lot of her personal pride ended up being attributed to her kids like my kids success are going to be what i deliver in life and so so her bar was so high on us everything like we would do a sport like go play tennis or play soccer and you have to win and if you come silver like it's bad so that just creates like a hyper competitive um uh nature but also there's this this feeling of like there's always an answer like you know whenever we had like a financial issue or like you know like you don't give up you you bang your head against the wall you go up you go left you go right you you go down i mean it doesn't really matter you're gonna figure something out all of that i think ends up you know now like you know decades later right like it's all in me and [9:35](https://realalpha.app/v/l_Boz3KRtBQ/?t=575) it it it matters because there's this sort of higher gear sometimes that like so most people have this thing of like well there's certain things that are within my control and certain things are not i don't really believe there that in that dichotomy okay i think it depends on the person like some people can just make a significantly larger subset of the universe of things that are like I feel like it can make things happen maybe be irrational yeah You can make, you can bring more things into the control. Yes. If you have, you know, like some people just think like, okay, like I. I can do it. Yeah. [10:09](https://realalpha.app/v/l_Boz3KRtBQ/?t=609) And it could, the scale of the problem could even become big. I mean, it's, I mean, Elon has a little bit of it, right? Like. He has a lot. Yeah. Like I feel like Elon sometimes, and I'm not, you know, my sense is like, as long as it doesn't break the laws of physics, like we probably can make it happen. It's in our control. Yes. Yeah. We're going to get into more CEO stuff. We just heard Ken Griffin from Citadel speak at this conference we're at, and he talked about picking best practices from different companies and sort of assembling his CEO playbook from other people he learned from, Jack Welch, et cetera, et cetera. [10:41](https://realalpha.app/v/l_Boz3KRtBQ/?t=641) Do you look up to one CEO? Are you following a playbook or are you just, I'm going to make it up as I go? I have a lot of, I'm going to make it up as I go. Yeah. So, you know, and I think this applies to Luana too. Like both of us, we're probably very sort of like entrepreneurially illiterate. Like we haven't read all the books. We haven't watched all the podcasts. You don't live on Twitter. I do Twitter a bunch just because a lot of our users are on Twitter, but not like in the sort of like here are the four steps to build a company sense. Okay. You're not in that ecosystem. But I have, I look up to, like, there's a lot of aspects, a little bit like Ken, honestly, like a lot of aspects of CEOs I look up to. [11:17](https://realalpha.app/v/l_Boz3KRtBQ/?t=677) Like, I think the extreme boldness of Enon and his ability to attract talent is amazing. I think Tony Eshoo I always go back to because I think his operational discipline and execution, I think, is one of the best. His business is so hard. So hard. So is yours, by the way. Yeah, our business is hard and marketplace and all these issues. I mean, but I think those are two names that consistently come to mind. But there's everyone, like, there's so many people. I mean, like the Colossians have done such a great job at like creating this sort of brand aura around their company to attract like incredibly talented people to build something that just goes beyond what the company is exactly building. [11:53](https://realalpha.app/v/l_Boz3KRtBQ/?t=713) And so I observe a lot of these different things and figure out like what I can take. But then after that, it's continuous iteration. Like what we do well, I think, is like we just try and we try fast and we're continuously like this work didn't work. okay like change it fast whether it's a hire whether it's an approach to things whether it's my own voice whatever it is i think we do this you know and i think that's the best way to find the right answer because oftentimes these things are very like i'm going to say company dependent but as i was saying that it's very like ceo or founder dependent like it's to your image it's very hard, you know, to market even your product if it's not coming truly from. [12:30](https://realalpha.app/v/l_Boz3KRtBQ/?t=750) what you're from who you are because the company is going to be to your image no matter what you do in your headquarters in new york do you think if you were based here you would be more in the mold of every other company probably i also think it would have been harder because you were going to talk down to some of your crazy ideas yeah maybe to some extent the the harder piece i was thinking is just recruiting i mean one of the reasons we moved that time what i like about new york is for our company's mission which is you know like figuring out how to build this idea of infinite market the next generation exchange like fundamentally rebuilding wall street like this new wall street that is more like global more for the people um it attracts it it has a stronger let's call it like uh market fit with the talent in new york yeah much better much better and then there i felt confident we could hire the top one percent of talent whereas here maybe but But I don't see, it doesn't feel like it burns as cleanly. [13:28](https://realalpha.app/v/l_Boz3KRtBQ/?t=808) I think here it's really AI right now. And I think even if, I mean, we didn't necessarily know that in 2020, but like, even if it wasn't AI, it was going to be something that is not finance, right? Okay, you and Luana have, I think it's 130 sort of direct reports. Have I got that about right? Yeah, yeah, pretty much. I mean, there's some functions that like, we sort of let them do like what they do. But pretty much most of the company reports do between the two of us. Okay, that's unusual. yeah it's pretty unusual uh five years from now are you it's unusual because it's small and it's unusual because it's zero hierarchy and it's unusual because they report to both of you um how does it actually work how is it not chaos it's kind of chaotic okay but i i think you could build an organization that's somewhat okay with that because what you get out of chaos is like continuous constant adaptability it's very easy for our company to adapt very easy i mean sam talked about pivoting and pivoting feels like a bit of a strong word but like the point is like you want to constantly reorient and reassemble around the biggest challenges or biggest opportunities for the company and you want to be able to do that with no friction that's inherently chaotic [14:36](https://realalpha.app/v/l_Boz3KRtBQ/?t=876) how do you that's a complex right like it's a complex system like totally it's like organisms and cells are sort of moving around and like floating in the ether and then they you know what i mean yeah and so like that's it like the world is inherently chaotic system so you know i mean and so we're trying to impose structure that is unnatural given how the world is moving And in a way that's accelerating over time, you kind of have to be more sensitive to the fact that it's increasingly more chaotic. Your structure needs to be as adaptable as possible. Okay, this is sort of the crux of the podcast because the CEO playbook that I grew up with, like handed down through the generations, I think is getting a big rethink. [15:13](https://realalpha.app/v/l_Boz3KRtBQ/?t=913) And like Brian Armstrong and Jack Dorsey are talking a lot about this new way to organize where it's not a pyramid. It's a circle. AI is in the middle. You're training the AI. All your systems are legible. Your people are feeding the AI. And the AI makes more and more decisions. Work chart's gone. Compensation is different. all the things are getting thrown out are you following along with any of that or you're just kind of making it up as you go making it up as you go i didn't even know about that i never heard about that but like um it's interesting one of the things i've learned by the way about all this i've interviewed all these ceos there's no one way to do it yeah you look the way jensen does it's totally different than elon it's totally different from yeah it's i was saying imagine jensen running citadel yeah that would be nuts you know or you know so i don't know i mean i think that like um or like even funnier like imagine ken getting dropped into open ai to run it like it would be so crazy but like um i i don't know i'm actually curious to hear your thoughts i mean like the the word is more interconnected than ever and i think just things are accelerating like the rate of learning the rate of change is like if it used to be i mean maybe like you have [16:26](https://realalpha.app/v/l_Boz3KRtBQ/?t=986) to readjust fundamentally every three or four years than every year i mean i honestly think you have to readjust fundamentally what every month or two i kind of agree i'm learning so much faster than i used to learn i'm picking up skills so much faster than i used to learn um yeah the world has changed like january to today like it's it's so crazy i mean like how it's it's hard for me to imagine making a certain set of decisions in january okay that truly applies still okay so how do you plan dynamically right It's the end of December. You've got a board meeting. Alfred Lin's on your board. What do you actually even present to the board? [17:01](https://realalpha.app/v/l_Boz3KRtBQ/?t=1021) Yeah, it's kind of like hazy a bit. Like, you know, the board used to be like, oh, it's not structured enough. But now I think they're kind of used to it. What is it? It's usually, so look, yeah, it's a good question. I tend to not have too much structure. And one other thing, actually, at Calci, we're not super metrics-y. Okay. In general. I thought you'd be the opposite. No, we're metrics-y, very hardcore, and like risk. Like how much margin are we giving to customers? like things that are like go directly into the product but in terms of decision making We should be a little bit more, and we will probably get to there a little bit more over time, but it's really more like, what are the customers saying? What are the pockets of demand that basically the energy is about? And where can we basically be first or be most aggressive or have a right to win? That's all the conversation where it's at, right? And then there's usually like one or two key challenges that tend to be the single most important challenges in the organizations. [17:56](https://realalpha.app/v/l_Boz3KRtBQ/?t=1076) like and let me just yeah let me give you the last sort of like uh maybe 18 months so off of the election that all the conversations what are we going to do about election how you're going to cross sell people are they going to stick yep and what they're saying at the time is like like well let's prove that this sort of this network effect engine now that we have we have a massive growth catalyst that it is going to create the chain reaction let's figure out how to like make sure that people are you know adopting other products and like get going and that worked like we really we really create that network network effect where we use that new demand to attract more liquidity which boosted all the other markets and then that helps us get demand at a lower cost and then we basically compounded there then after that it was essentially like okay we we need to prove our broker strategy is working so we had the direct to consumer that was going pretty well but we wanted to make this bet that um becoming an infrastructure layer like all traditional financial markets that we enable a bunch of brokers to basically go and like could we prove that we can do both at once and that one was going a little bit slow so the next six months [18:48](https://realalpha.app/v/l_Boz3KRtBQ/?t=1128) we're like scaling that we got a bunch of brokers that sort of really started working out then the challenge was actually proving that we're not too dependent on the brokers okay because those were too well they became 80 of our revenue okay so all of a sudden it's like oh amazing the revenue like ripped but like now you're super dependent on a bunch of your big broker partners so what [19:07](https://realalpha.app/v/l_Boz3KRtBQ/?t=1147) **Tarek Mansour:** are you gonna do now it's like okay now we have to go back to focus on the direct and like really scale that now that we have an extremely liquid ecosystem because the brokers brought more demand [19:14](https://realalpha.app/v/l_Boz3KRtBQ/?t=1154) more liquidity the whole thing is flowing now now the brokers are like 10 of our uh volume okay all the way back to 10 yeah so so that and i i want to talk a little bit about this adaptability thing because all of these were i mean we're talking about like going from like elections and like sports then we got into financials then you went to a consumer business and a b2b enterprise motion and we went back and we did all these in the span of like you know what like eight months right and then it was like a lot of the policy stuff and and we should talk about that a little bit but like you know you're like exciting exciting exciting all the way to till you get mainstream and when you get mainstream society all of a sudden is like whoa stop stop right there let's figure out what this is we don't understand it you know now you have the grandmas and feel like that's going on right now yes exactly it's been going on for six months but like an ai you know ai is battling with it like airbnb uber all of them at some point When you get a reckoning. And now, like number one priority since January, and I think we've done a great job at sort of positioning ourselves as a safe, responsible actor. [20:09](https://realalpha.app/v/l_Boz3KRtBQ/?t=1209) Particularly right now, after all the news about polymarket recently. Yeah, I think we've done a really good job at always being kind of regulatory first, do the right thing. But we had to kind of tell that story, and that's also hard and comes with all these challenges. But, I mean, think about that, right? Like, it's completely different functions. Like, you know, even if I build the best consumer marketing company, how is that going to help me with the brokers? And if I build the best sales function, how is it going to help me? And so it goes back to like, I think, okay, how do we resolve these problems? [20:39](https://realalpha.app/v/l_Boz3KRtBQ/?t=1239) Generally, there needs to be at least one founder in any of these big media problems that we need to get right. I really strongly, like I affirmatively strongly believe in that. And so is there one of you that's a DRI on these big hairy issues? Okay. Like the responsibility, the person that is going to get grilled is one of Luan and I on these top issues, these things that we need to get right. And I cannot, and I may be wrong, and I may be over time as the company gets more mature, I may change. So maybe in a few years, we should have another chat and see what I think. But in this sort of level, like this growth phase and all that, like, my analogy to this is a bit, and I think honestly, this applies to any company at any scale. [21:21](https://realalpha.app/v/l_Boz3KRtBQ/?t=1281) I really, really think so. it's like you're like on this big ship and you're driving you know the ship as fast as you can you're trying to win this but there's always a hole in the ship and that hole is leaking there's water [21:32](https://realalpha.app/v/l_Boz3KRtBQ/?t=1292) **Tarek Mansour:** coming out of it and i think there's two types of organizations one where the ceo or the founders are straight up staring at the hole all day every day which is brutal it's painful it's like that [21:44](https://realalpha.app/v/l_Boz3KRtBQ/?t=1304) was me yeah it's you right i think you talked about that you know and and the other type of organization that like sort of either gives it to someone yes and generally that what that someone is going to do it's very painful why would they why would they take through all that pain i mean you know how painful it is right it's constant pain it's like it's essentially like continuous torture right so they add like a rug on top of the hole you know and like you know like we're good you know things are growing and but inevitably that hole at some point is going to start sinking the ship inevitably and whether this is your google and ai is coming after you or you know your AI and like 90% of America hates you or like, you know what I mean? [22:22](https://realalpha.app/v/l_Boz3KRtBQ/?t=1342) What's your hole now? What hole have you got? I think in January, what I would say our big hole is like, we need to differentiate ourselves with the unregulated stuff and the insider trading issue. Because you've always taken it seriously, but like, you know, you poll people and they had no idea, they have no idea of the difference, you know, like the regulated onshore prediction markets like Cash and Robinhood and others, and some like Polly and others that are doing it offshore. And that was really bad for the industry. So, so we had this, we had to kind of, kind of like clean up the industry's reputation and I would say we've made a significant amount of progress, but that hole is not fully covered yet. [22:52](https://realalpha.app/v/l_Boz3KRtBQ/?t=1372) Like we still have work to do in terms of like explaining that, like, look, there is the right solution to all these things is get it regulated, do it the right way. and there are people doing it the right way and here's how like with all things right there's a right solution for ai's you don't decelerate ai you you you add the right guardrails and i think figuring out what those guardrails are and figure out how to communicate it effectively and figure out why they're the right ones is the hole and um that's where i spend pretty much like 80 percent of my time in right now okay the hole is an interesting spot in your competitor has been called out by the wall street journal for their marketing practices and congress is taking about you're used to all this stuff is this thing that's happening to polymarket at this moment good for you or bad i think it's bad for us i think it is too yeah for sure i like i i think you know when you start competing you realize competition is actually really never a real problem i really think so i mean unless unless you're in a small market i guess maybe that's a that's a problem but if you're in a small market then you figure out the next big market and figure [23:50](https://realalpha.app/v/l_Boz3KRtBQ/?t=1430) out how to go take it and split it with a competition it's okay we used to always say at hubspot we competed with salesforce.com and every time salesforce would like move the ship a little bit everybody in the company like we gotta move the ship in the exact same direction and i would say every time they zig we gotta zag yeah yeah there's always i mean but i just think i don't think that's a and maybe let me like say it maybe a slightly like more nuanced way like i don't think competition will be true like is ever a true sort of like company killer like i i You know, it's like if you're in a big market, you're going to have a big piece of the pie. [24:22](https://realalpha.app/v/l_Boz3KRtBQ/?t=1462) And if you're not, you should probably be in a like should be constantly iterating and shipping product and finding new on tap markets to basically go and win in. And and, you know, like there's I believe in abundance. I mean, it's hard not to be in abundance, right? Like, look at the last like five years. It's crazy. And so you were you were well behind them. And from what I can tell, you passed them a lot of it in sports, like really crushing that. We're bigger than across. i mean we're like in the us 95 market share now okay so across the board how'd you do it i mean i think it's like you were way behind you know it's interesting we were way behind in the headlines like okay maybe but like so we started coming in 2018 it's been a long On time. [25:00](https://realalpha.app/v/l_Boz3KRtBQ/?t=1500) Yeah, I want to get into that. It's been eight years, right? But we didn't really launch the general public until end of 22. And I think our proper launch was end of 24 when we're allowed to do the markets that people really want, which is the election and other markets. And they launched in 2019, a year later, or started the company, and then they launched immediately without a license. So they were the brand that sort of did it. But we were very dogmatic in our approach, which was we're going to do it the right way. Why? I think there's two reasons. One that is practical, which I think in financial services and healthcare, I don't think you can cut too many corners. [25:29](https://realalpha.app/v/l_Boz3KRtBQ/?t=1529) I see. [25:29](https://realalpha.app/v/l_Boz3KRtBQ/?t=1529) **Tarek Mansour:** i don't really believe in that like i know in silicon valley it's like move fast and break things and figure out how to regulate later like not in financial services i think financial [25:35](https://realalpha.app/v/l_Boz3KRtBQ/?t=1535) services inevitably things go wrong and when they go wrong they go wrong bad uh and so i if you want to build true mainstream adoption and true like institutional adoption and like all that these people will care like how are you doing things are you regulated what like so they will care and i think so that was one number two is honestly like it's a bit it's a bit more philosophical i was excited about changing the system fundamentally like building the next generation new york stock changed from within like change the system no matter how hard it is then going offshore and building something on the side and you know like that was just not exciting to me i i didn't feel like i'm pumped about doing that so and we were we stayed dogmatic about that approach but what we were doing is building an incredibly great product and great infrastructure and and great regulatory infrastructure that like like the word trust like i think people trust us more like when they put their money there they feel good about putting money with us they feel good there's not to be Put some money on the Red Sox last night and they beat the Yankees. [26:27](https://realalpha.app/v/l_Boz3KRtBQ/?t=1587) Oh, nice. Great. But I think there was that. I think when we did get regulated and we got approved, our trajectory just went really parabolic. And I think it's a mix of that sort of foundation lane that we've done for a while, which I really believe in. I think if you believe that you're going towards a good market, building a solid foundation, even if you're not growing, is okay. And then I think we just have superior execution on product and growth. We compound at a much, much faster rate. And given enough time, the results start showing. While you were there, it's 2018 to start the company. [26:55](https://realalpha.app/v/l_Boz3KRtBQ/?t=1615) You wandered through the desert for a long, long time. Very long time, yeah. CFTC was smacking you, saying no. Yeah, the government was trying to kill us. Yes. It must have been brutal. What was the lowest point? Honestly, I don't even remember. It was basically like it was truly like just sort of like it was bad. I mean, it was so bad. And it's like you're constantly in a state of grief. and then you start like you know you're like in this desert and you start seeing like you literally start like you're so desperate they start seeing fake mirages mirages yeah you you know you See something, oh, here it is, finally, and then it's not true, and it's disheartening, and it's just hard. [27:35](https://realalpha.app/v/l_Boz3KRtBQ/?t=1655) But the thing that was unique about us is we never pivoted. It was always Kalshi. I mean, Kalshi is everything in Arabic. We always wanted to build the everything exchange, the exchange for all these different assets, and we always stayed sort of, because part of it, and looking back, and when I was thinking about it, we didn't build Kalshi to build a company. We built a company to build Kalshi. It's a bit different. We were dragged by the idea. I wasn't the type that wanted to be an entrepreneur. or like i i think if you re-roll the dice multiple times i'd probably just be a trader or risk manager like i would not be an entrepreneur got it but the idea was so like glaring in front of us that we just had to do it like we felt that we had to do it and so the whole point of doing this whole thing is the idea okay so when that's the case and like if you lose the idea then you know a lot of people listening to this are walking through that desert yeah and i i read this book a long time it was called the dip and you're cruising along you get down the dip and you don't know if you're about to hit the bottom and come up. [28:26](https://realalpha.app/v/l_Boz3KRtBQ/?t=1706) That's what's hard about it. Or if it keeps going. Everyone thinks you're delusional. Yeah. Advice for the CEOs out there walking through the desert. You know, the book, is it Ben Horowitz, that wrote a lot about the... Hard thing about hard things. Yeah, there's that paragraph that's so good about it, which is like the reason why it's hard, it's not like you're lifting something heavy or whatever. It's like no one can reassure you that it's going to end, right? Like what I firmly believe, and I really do, is the number one reason... Did you want to give up? For sure. every day you wake up you're like what am i doing and was luana like no we're sticking with it like what was the dynamic i mean we both had our points luana was definitely much more stubborn okay continuously like luana is just like yeah you know like luana had a lot more than you know stop being a little bitch basically like you know just life is fine whatever like let's move on yeah and what i believe is basically if you give yourself enough of a time horizon you inevitably we win or you run out of money yeah but i think that's like a i don't think it's a real killer of companies okay you can always extend your runway and like it's not that hard to raise money [29:28](https://realalpha.app/v/l_Boz3KRtBQ/?t=1768) nowadays yes and you can pivot with the new idea and like nowadays it's it's really the number one risk is giving up right and and so but but then but that it's interesting because when i say that to me the message should not be like oh i should like do it at all i see a lot of founders and they're walking through the desert i think they should give up because it's opportunity cost yes you're 35 you're gonna spend the next four years walking through the desert start something new i think just ask yourself why you're doing it right so so it goes back i mean you know that you know this like to me maybe like there's a few buckets there's like the idea is something that you're really passionate about you should keep going right because you're There's, I think it's hard. [30:01](https://realalpha.app/v/l_Boz3KRtBQ/?t=1801) I mean, maybe you're not, but like, then there's a second bucket that's sort of all the things that people believe to be true after you make it. And I think that's a bad, I really think that's a bad reason. [30:13](https://realalpha.app/v/l_Boz3KRtBQ/?t=1813) **Tarek Mansour:** I like, because, but you know this, like it's, it's, it's a career, right? It doesn't end. You have all sorts of different issues over time. [30:23](https://realalpha.app/v/l_Boz3KRtBQ/?t=1823) That like thing in your gut stays there. It never leaves you, right? You're always stressed. You have to make sacrifices on your life. Like entrepreneurs don't have a good life in the traditional sense of the term, right? You don't get to that oasis that you thought you were going to get to, right? You actually just get into different deserts and those deserts get maybe less, there's some water in the desert, but like, but maybe the better analogy is like, you go from a desert to like a storm and that storm sometimes is like very clean water. Sometimes it's a shit storm. Sometimes it's like, you know, and then, you know, but it's a different type of, you know, craziness or or and maybe it's more motivating day to day it's stress and it's not just like depression but like but it's not the life that you like oh you you finally made it you're successful you're on the pedestal like okay so what do people think about what the life of a rocket ship ceo is like versus the reality what do people have wrong it's it's just like like is it glamorous no no i mean especially i mean look some people i think i i see it sometimes it's like when you get to that and it's finally made like they really go enjoy life but it never be then like the company [31:28](https://realalpha.app/v/l_Boz3KRtBQ/?t=1888) is going to go sideways what's your life like i work a lot all the time i mean um are you married do you have kids i i have a partner it's been like four four years and some and complains a lot um no she's honestly great but like it's tough right she sacrificed a lot also to for me to get here because she supported me in the hard times supported me in the in the good times which are also hard keep her right yeah yeah she's she's like she's the best i mean i think the the but there's sacrifice on that front i think that i travel a lot i i wake up so basically i wake up every day at seven uh i'm usually at the office by eight and i work i leave the office usually at 10 uh i work a little bit at home i usually like maybe like waste time on instagram reels for like 30 minutes and i go to bed what's that what's the weekend like uh i usually try to like go out for dinner one of friday or saturday um generally saturday because friday i'm so tired like i just need to rest and if i'm not trapped like, I'm basically in the office Saturday, Sunday. [32:31](https://realalpha.app/v/l_Boz3KRtBQ/?t=1951) Like, I go to the office Saturday, Sunday. I kind of like being in the office. Is everybody, by the way, you're getting... Most people, most people, like... They're in there. Yeah, I mean, but it's not forced. It's not like, oh, you know, like the hardcore... Yeah. We try to do it in a way of, like... So no one is ever kind of, like, slapped or there's no expectation you're going to need to be in the office with these hours. I don't believe in that sort of, like, put everyone in the office 24-7, hardcore grind. That's gonna... I do believe the founders can do it because we have the most incentive to do it. [32:57](https://realalpha.app/v/l_Boz3KRtBQ/?t=1977) And if the founders do it, naturally, others are like motivated they want to be next like they like coming on saturday because there may be a little bit less people and they can sit next to you and ideate about a bunch of things and hopefully you got the right people that would show up but they don't have to you know okay let's just get back to the ceoing since we're there 100 would we say 130 150 direct 130 to 150 now it grew a little bit 150 you're and like 150 is an interesting number because it's dumb bars number it's hard to keep track of anything north of 150 it's hard to interview those people most companies started hiring middle managers what is is it is it like 170 three years from now is it 500 are you like william i i'm friends with william hockey at column yeah he's like at 130 he's like i'm staying at 130 is that you uh william is very good i think he's done a great job i i don't know i mean um i'm just thinking about the things that scale linearly so historically support but we have less than 10 support people you know obviously millions of customers you can automate a lot of that yeah it works really well honestly like if you train the right it's amazing honestly um so that's that's a linear thing that's gone i mean as we scale our institutional side i think [34:07](https://realalpha.app/v/l_Boz3KRtBQ/?t=2047) potentially sales could scale somewhat linearly but i don't know you know i'm kind of a believer in i'm actually curious what we think but i'm kind of believer in like a strong marketing and brand marketing as a as a fundamental enable of sales and like enable enabler of top of funnel yeah where's if you do that yeah yeah if you do that very well i i think people just sort of follow each other where does that come from from you you mentioned that a couple times like you're really detailed in the copy and all that you didn't grow up you grew up as a kind of mass cs guy where does that come from and is it all good but the perfectionism that came from my mom like i i'm like i tend to have ocd and obsessive with these things and i want things to be really perfect like as perfect as well and it actually is exactly it really matters this is the key thing like the all the results are in the last 10% like most people 80 20 it that doesn't work everybody's 80 20 okay it has to be Perfect. [35:00](https://realalpha.app/v/l_Boz3KRtBQ/?t=2100) And if you, it's like this sort of, especially with marketing, there's like this sort of like a resonant frequency that you have. This is your mom talking right now. But, but this resonant frequency concept is very interesting because I think when you hit it, you get these dramatically improved results. Right. And, and like, Give me an example. You know, the, the, there's so many of them, but I'll, I'll give two separate ones, specific on marketing. So one is like, so when we first went mainstream was during 24 election. and one of the ideas I had is like we should do billboards across the country and the billboards are basically the product it has to be the exact same as the product and it's live and it has to be piped with the API and every time a trade happens on the app it's going to be projected out in Times Square and in LA and all these billboards in real time that had to be perfect so that every time people look up they build a habit of like I want to see the odds and like Kalshi is there for me to see the odds and if it is then you get the viral mechanism and like you know all of it works and it worked but it took maybe something like 20 iterations of putting it out there retaking it back and to get it right okay it's brutal like your designer get exhausted [36:03](https://realalpha.app/v/l_Boz3KRtBQ/?t=2163) the time the engineer gets i mean everyone is exhausted yes and but that's sort of stuff that no one's going to do other than the founder the other thing i think i believe strongly in marketing is the timing needs to be like exactly right it really matters and you know people always you know even when for example what do you mean around what pretty much everything the more important like people don't care about us people don't care about anything like they just care about what themselves and then what they're reading on any given app i mean used to be any given month and week day and maybe now every few hours that changes they forget there's so much stuff going on all the time you have to basically bring cash to whatever is happening or yourself to whatever happening in the wild not try to kind of push whatever you're offering to people and so what mean by that like so in the last few months if you look at all the marketing integration we do a lot like we partner with this and that so we did messy two days before his first game of his last workup why because well it's two days before his last game i mean he's peak relevance right now right timothy chalamet we launched that commercial 12 hours after the whole thing that happened with [37:05](https://realalpha.app/v/l_Boz3KRtBQ/?t=2225) the knicks why because everyone's talking about timothy chalamet at the time right if we had done it now you also did the ai video before anyone did yeah yeah because it was a time where you know the artists there was a whole debate about the like you know the artists are they gonna go now it's not cool because that's you you're obsessive about that kind of yeah mailing that kind of thing and always knowing what but now if you do the ai video like you should not do ai videos anymore now it's done now it's cool to do real things yes right but that's So the timing with these things is like, it's so important. [37:33](https://realalpha.app/v/l_Boz3KRtBQ/?t=2253) Okay, that's what you mean by that. The Messi timing was incredible. Yeah. And the Timothée Chalamet timing was incredible. I assume you had that in process with Timothee. Yeah, but we were always waiting. I mean, Giannis, when we announced him as an... Like the Knicks get knocked out in the earlier round. You're still going live with that. Yes, but we were waiting for the right... So we were used to thinking we were going to do it at the Oscars, but then we waited. I see. [37:53](https://realalpha.app/v/l_Boz3KRtBQ/?t=2273) **Tarek Mansour:** And so we were waiting for the perfect moment because then that's when you get the 100x outcome, right? [37:58](https://realalpha.app/v/l_Boz3KRtBQ/?t=2278) When Giannis, when we announced Giannis as a basketball player was essentially a day after he announced that he's not going to leave his team. There was all, yeah, exactly. Now he's going to Miami. Now he's going to Miami. He's peak relevance at the time and now he's peak relevance again. But that applies to everything. The AI ads, I think we've done a lot of work on the, like when we did the news integrations back in the fall, we announced CNN and CNBC and Fox. all of these were like we really wanted to time them at peak moments where people were talking about this debate between is the news sort of like uh gone is it like a thing of the past and for us the angle was never like oh cash partners it was like the news is actually modernizing how did i know you want to time it well but does timothy care does cnn care does the new york times care do the counterparties battle all these different things and you cannot have too much process and you have to break their own processes you know it's all of the same that we discussed That's a shit fight. [38:53](https://realalpha.app/v/l_Boz3KRtBQ/?t=2333) If you have had a partnership that's doing, you know, a whole structure and they plan for three weeks, you can't do that. Did you hire any professional marketing person inside your company? Not like I had in any way. I could not. I mean, we have a CMO, Alan, he's incredible. So Alan takes care of all the scientific pieces, very good at spending money to basically with high ROI. And then the rest is like, you know, so the person that leads our brand or leads is doesn't have any direct reports. It's just sort of flying around country and like doing cool stuff. and he he ran a twitter account before that you know the inverse kramer that wait that's where he started he was he's the inverse kramer account remind me like you know the inverse like jim kramer when he yes yes yes yes yes he's like the inverse kramer like index you make more money betting against yeah exactly so and like i thought he was that was him yeah and i hired him i was like you want to come and do our social he started doing our social and he had like a knack for he came up with the AI idea. He has a knack for these sort of like weird esoteric ways to just like be part of the zeitgeist. And you know what's interesting? That has worked equally [39:58](https://realalpha.app/v/l_Boz3KRtBQ/?t=2398) for consumers and Okay, I didn't expect you to say that. Yeah, people would think like, oh, you know, institutions want sort of this. They do, and like, they want to be able to talk to a chief risk guy, and like, they will, and we have all that. Like, we have a very strong, robust foundation. But being top of mind just matters. Continuously top of mind is very important. You've got a knack. I'll give you that. Okay, I want to wind the clock back because we haven't completely finished the desert story. at some point the conversation happened inside of the company hey we should sue the cftc whose idea was that and what was the reaction you wanna i mean uh what'd you say i mean it's crazy right like the i mean it is crazy it is actually crazy and also i mean it ended up being crazy all of it even though we won i mean that because like um it's so much more than just being right like it's so much more than just the lobbying you know right it's unfortunate but it's the truth a lot things are political and depends on how the winds are shifting and um and the government is truly all-powerful like they they can just do things for private to private companies or probably or companies just like companies in the private sector because um by the time you hold the [41:12](https://realalpha.app/v/l_Boz3KRtBQ/?t=2472) government accountable to that thing you probably will be dead basically or the cost would be so ginormous yes you know the government doesn't really incur any cost they're protected from any cost okay but take me in the room when she brought it so so so you know there's a little context that because we started trying and this goes back to how much foundation we built like people always think overnight success always been two years but it hasn't all of this has been like part of a very long-term plan a bit like jensen right like he's built such a foundation for so long and that's how these things go and we started engaging about the election market before we even launched the general public in the end of 21. we started talking to the government saying we want to do this it's very important here's why it's gonna work it's gonna be the most accurate gauge and here's how it's legal which it is um and they're like okay fine we'll work with you you know whatever month after month they wouldn't give it to us they wouldn't give it to us i had bet all the company on like the election market for 22 the 22 midterms that was what we're aiming towards the board is ready for it etc and they keep like delaying delaying delaying [42:07](https://realalpha.app/v/l_Boz3KRtBQ/?t=2527) up until they pushed it after the midterms so they pocket vetoed like they didn't say no they just managed to politely delay us enough that it didn't happen so that was heartbreaking you know it's been like we started in 2018 we finally got to 2021 finally excited about launching the whole company was excited everyone's excited launch and all the issue about launch started working on the election market and gets banned at the end of 22. so now we launched with a very limited set of Things that's going to be very hard to get the exchange running, but they banned us. We lost a lot of the team over it. [42:34](https://realalpha.app/v/l_Boz3KRtBQ/?t=2554) And you know, with these situations, what's really hard about these situations- Did you push them out or they left? A bunch of people left. Did you do a layoff? And then we had to do a layoff. And because what happens in these situations is that- I'm going to go on a tangent. I think it's an interesting thing. Let it rip. So there's this concept of expected outcome and outcome. Yup. And they're oftentimes not the same. There's a variance for the outcome and the expected outcome is, you know, based on your decision-making where it should land and then there's a bunch of variance in the word that pushes you in the direction and the world doesn't reward you for expected outcomes they reward you for outcomes expected outcomes what you have control over is like the work you do and it's interesting because I think at that point like the coin flip landed against us and the entire world is like wrong strategy wrong execution etc and it's interesting because that was the same time where I am a big messy fan so so Argentina won the work I was super happy but you know the day after I just not want the workup I don't know if you you know know this but the french you know the the the france the country really the population [43:32](https://realalpha.app/v/l_Boz3KRtBQ/?t=2612) wanted to kick ass the french coach deschamps who is an absolute legend like the guy won them the prior world cup incredible performance got them to the final of the next world cup and to the to the penalties and obviously penalties are a coin flip i mean um and they blamed him and you know it's you know how hard like the the number of teams that made it past the sort of group stage after having won a World Cup is basically trivial. It's very, you know, usually the team is very hard. It's very hard to kind of go twice in a row. So, and it was an interesting thing which is like he flipped the coin, landed against him and people wanted to oust him immediately, right? [44:05](https://realalpha.app/v/l_Boz3KRtBQ/?t=2645) And so we lived through that. Did they want to oust you? No, I think, but like people lost confidence. It's like we should pivot and like it's the wrong strategy, wrong strategy, wrong execution, all of that. Like we were not doing a good job, basically. It's on us. And it's fine. You should hold the followers accountable. But the key learning with that, what's interesting, A little bit with poker. [44:25](https://realalpha.app/v/l_Boz3KRtBQ/?t=2665) **Tarek Mansour:** The best poker players, they know when they're playing a good hand and they're okay with the variance. [44:28](https://realalpha.app/v/l_Boz3KRtBQ/?t=2668) They can lose a lot, but they'll stick to their game. And they know that over time, the variance is going to come back and with enough plays, they're going to win over time. And you see with Elon, you see with some of these founders that can take these extreme risks. As long as they know that expected outcome, they can intake the variance over time. And I think there's a lot of alpha in there. And for founders that have gone through that multiple times, I see it with Vlad and Robinhood. I see over time, they gain a certain level of confidence. that is hard to describe, but it's like I've gone through it. [44:56](https://realalpha.app/v/l_Boz3KRtBQ/?t=2696) I'm okay with the fluctuations. And is this making sense in the rearview mirror? Or is that making sense at the time? No, not at the time. Okay. But now in the rearview mirror. Because, okay, so 22 happens. And we start to answer at the time. A whole, we go ahead and reset. We're going to do something else. We're going to figure out what to do. But again, we're so, we want to build Cal Street. That's what we want to build. And we cannot do it without the election markets. We're going to try again. Okay. So you go back to board. We're going to try again. Everyone's like, I mean, okay, these guys are saying we got delusional. [45:22](https://realalpha.app/v/l_Boz3KRtBQ/?t=2722) We try till the end, another year, end of 23. Now they say no. They reject us. Okay. so again you know it's like goes from a low to a lower yes and this was you know in the room it's like oh what do we do again roller coaster a whole thing and i was like you know what this time we'll sue them you know so it's like we're not like it was how did it actually work like you got the email of it it's like no and then right away she's like we should sue we want to and that someone was like we're probably gonna get a no again so we should start preparing the lawsuit okay we should sue them and start to talk to the board you know we had a lot of conversation with alfred you know michael's at the board at the time and what did alfred say the first time you pitched him on it he's like it's a crazy idea like you're a tiny startup even if you win you're probably gonna like incur a significant lot you're probably gonna lose and he's right that we were probably going to lose and he's like coming of your size even for bigger companies you never win against the government it doesn't you know he's your own they have all power over you they're your own regulator suing them is gonna call like they're gonna kill you and and when i was super dogmatic [46:15](https://realalpha.app/v/l_Boz3KRtBQ/?t=2775) i was sort of battling it etc but then there's a few things that sort of came out of that like one one i was a complete no-brainer it was pretty much i mean i would oscillate all the time i would just be like this is crazy i mean okay i'm gonna come after us i'm gonna come after us personally i think ceos are gonna love this because i oscillate all the time on stuff like that i oscillate a lot which i think is okay i hid my oscillation as much as i could but it definitely showed up yeah and i think it's okay honestly like i i because it's hard to have the right i mean it's so complicated right and but um and i would all say it etc and i remember we got to a meeting at some point that like i was still oscillating and like you know it's the night before we're gonna file etc and like you know i was like are you shitting me like you know it was basically she like went so hard and she's like you know fuck this like you know like we should just do it like we're wasting time and you know it was like everyone else in the room there was this sort of feeling the missionary thing you could feel it of like you know we came so far like fuck it let's just go full on war let's bet everything in your poker head where you're like [47:11](https://realalpha.app/v/l_Boz3KRtBQ/?t=2831) there's probably a 20 chance this will work is a one percent chance it was so hard to prize but i thought through all of it which was basically and like alpha was right in many ways but like they could kill us because they could essentially yang the clearinghouse from under us and kill the company we would die maybe even before we even get the result which is the risk, they would, they could like death by a thousand paper cuts. They can start doing a bunch of things for you. But then I was like, if it does work, the outcome is so big and the expected value seems pretty attractive, actually. Even if a low percentage odds of success, the outcome is so big. [47:45](https://realalpha.app/v/l_Boz3KRtBQ/?t=2865) Were you, okay, so obviously. It's an asymmetric bet. It's a big one. We bet the farm and we're like, let's see what happens. In the moment you, the timing was extremely good on winning. What was, was it an email? Did someone call you? what was going on in where were you yeah so you know i the litigator yakov roth who led this and you know we interviewed everybody i picked him because he's extremely smart but the thing that i felt he was really good at he like he had a missionary like this man wakes up in the morning and thinks about how to put the federal government in check okay you know you want that person just like this guy yeah so it's like he's an amazing litigator but like in the summer of 24 you know usually we text and all that he called me and i got really anxious i thought that the court hearing came like i was like what like you know he's like what's up and he like talked to me about something you know yeah and like dude my heart dropped don't ever call me like you should only call me once you have the court decision like never call me ever again text me i don't want you to call me because you know in the 10 seconds where i have to pick up the phone my heart dropped she's like okay fine [48:52](https://realalpha.app/v/l_Boz3KRtBQ/?t=2932) i won't call you until the decision and i was sitting you know on my desk and i remember like rayner one of our engineers sitting next to me and like his name pops up on my phone okay and like i could like my entire body like i just could feel you know you know these moments where you feel your entire body just sort of like paralyzed like oh shit and so i pick up the phone and i was i was like why are you calling me you know and then he's like we won and after that i don't remember like we were throwing like chairs in the office i mean yeah we were throwing chairs in the office we like we like basically destroyed the office you know it's like i mean it was unbelievable because you know it's like you want and in that year we suffered so much because you had like the competitor like where you know poly was getting the brand and we were staying true to our strategy we're going to stick with it the government was yanking the clearinghouse from under us um enforcement action after the other they were finding random things to just like great actions against us audits you know the audits that usually take 10 days they were mill to nine months yeah it was just sort of like truly painful like you know the whole [49:55](https://realalpha.app/v/l_Boz3KRtBQ/?t=2995) like warfare thing it truly happened and they make your life miserable And not just the company, you own personally. It's like kind of this intimidation tactic up until you cave, up until you're so exhausted. And it was just so vindicating. It was so nice, right? And finally, it felt like we finally had the opportunity to just sort of like win for the first time. Okay, you win. And of course, you knew this was going to work. Did it work like way better than you thought? not in the first few days oh it's like all things yeah it's like all things you have to build the motion and you have to build the brand and you have to so we but this is the thing you win and then oh let's launch it and then nothing happens by the way the time you won this case like four weeks like three weeks and a half before the election was that random timing yeah you gotta get it sometimes you know fascinating you know tony says it sometimes like you you need luck sometimes yeah is it because we're just lucky i think part of it yeah you need to be you need get lucky but i think you took risk and we took five six years of expanding that locked surface area so at some point we could but it didn't work even better than you imagined after we started [51:02](https://realalpha.app/v/l_Boz3KRtBQ/?t=3062) compounding so it takes time everything takes time but in those three weeks and a half like look we have three weeks and a half to make this go mainstream yeah everybody's in the office i don't i like basically honestly would shower maybe like once every four days like i was just like i don't care about anything this is my shot and so we worked so hard in those four weeks it was slow slow so but then it started upticking and then the machine started going and then when it started going it was beautiful it was amazing i got a 21 year old son and he and all his friends use calci yeah and i know you're going to say it's trading not gambling but i'm a little afraid some of them are going to get addicted there are similar impulses i mean look i think there's a few ways to think about it so so let's talk about the policy and then actually what we're doing because i care about like i think about that a lot and i care about that yeah um it's like my paranoid brain i don't want people to get hurt and with all technologies people whenever we get hurt they will use it in a bad way right this is true for airbnb and you know and are you hearing from mothers yeah and actually it's mixed because so let me kind of walk through a few things so [52:01](https://realalpha.app/v/l_Boz3KRtBQ/?t=3121) first the policy aspects i think and this is important for everyone at some point you're going to build something very big especially in consumer and when it truly hits mainstream you're going to get haters there's going to be a bucket of society that's going to be worried because they don't understand it or they don't get it and they're worried about the risks and they don't see the like a lot of people don't see the point of ai why why lose our jobs over someone something that can do our homework better i think they're missing the point obviously but you need to educate that part of society and then you have incumbents because inevitably if you go mainstream you're going to be taking it someone and those incumbents would go very hard after you when the taxis went after uber they didn't go after them saying hey our margins are threatened that's why you should shut it down what they say they said it's unsafe and kids are getting hurt and kidnapped and airbnb was the same thing with the hotels like they would find one case of one person that you know had a very terrible bad experience or something really horrible happened and they would blow it up in the new and you know so for us the easy low-hanging fruit is called gambling and it's interesting because [53:03](https://realalpha.app/v/l_Boz3KRtBQ/?t=3183) pretty much all trading products that has ever come to society have come through a fight like have basically emerged through a fight of them being called gambling so grain futures were actually legalized with the supreme court decision in the 1900s like futures a boring commodity futures market at the time the states were were suing and there was my son is not trading commodities futures. But they used to be. Fine. The farmers weren't. But kids weren't. No, that's not true. Like, I mean. Oh, is it really? I don't know anything about that. The farmers were 20 and 18. All right, fine. By the way, the age to trade futures is 18. [53:37](https://realalpha.app/v/l_Boz3KRtBQ/?t=3217) Okay. Right? It's actually, you know, that's what it is. I mean, now there's other more interesting. Maybe my son runs in a different crowd, but none of them trade. By the way, I want to address this. But I'm saying, but that's because society evolved. Like, there's now crypto and meme coins and all these other things, right? Like, at the time, there was nothing else. This was the primary mechanism of speculation. That's what everybody was doing. But the claim at the time was like, this is gambling, and we should basically regulate it as gambling and not as a financial market. And the Supreme Court said speculation does look like gambling because it does. [54:05](https://realalpha.app/v/l_Boz3KRtBQ/?t=3245) Yeah, so it's the stock market. Yes, exactly. But there's a price discovery aspect to this where you're on an open, transparent exchange where people are trading against each other that makes it a financial market. And that's why we need to regulate it as a financial market and so on and so forth. Fast forward to us, there's a few things that are very important. One, the incentive structure in the model. Gambling, I don't gamble. I don't really like gambling. I like trading. Gambling is a business model where the revenue of the company is equal to the customer's losses. So over time, you block the winners, which is what they do. [54:38](https://realalpha.app/v/l_Boz3KRtBQ/?t=3278) They don't want the smart, mathematically oriented people that are doing research. And they want the people that continuously lose. And those people, they give them promos to come back. And that's how you create these addictions. But they cannot really solve the problem of addiction because the revenues are equal to the losses. So over time, what do you do? Well, you have to increase the losses. That's what you do. You have to create those types of behaviors, or at least not throttle them too much. The losses don't go to me on Kalshi. It's the beauty of a derivatives market or my market. Liquidity goes to you. [55:03](https://realalpha.app/v/l_Boz3KRtBQ/?t=3303) Yeah, I take a 1% fee whether it's somebody who loses or not. So when someone is exhibiting bad patterns, those laws are going to someone else. I have all the incentive in the world to basically throttle them and figure out how to get it right. But let me just push back a little bit on that. In a casino, they try to block the car sharks. Yeah. But in your world, there's a lot of car sharks betting against my son's friend who… For sure, but that's like… Who's going on a gut feel. Yeah, that's absolutely right. Like, absolutely. Now, it depends on the incentive structure. I want smart trading. I want to incentivize people to do research because the more liquid, the better the forecast, the more truthful my forecast, the more people look at it, the more my top of funnel increases. [55:44](https://realalpha.app/v/l_Boz3KRtBQ/?t=3344) I want the smart traders. There's a very different structure from the casino, which is like, you don't want the smart behavior. You want just the excessive money-losing, continuously money-losing behavior, right? So there's that. now it's important to understand not everybody wins on cal she of course not everybody wins in the stock market not everybody wins in the options market not everybody wins in athletic competitions not everybody wins in competitive environment the highly competitive environments right it's a highly competitive it's a competition it's a highly competitive activity in nature and inevitably there's gonna be some people that win and win more like how many people win the nba finals or how many people win you know the champions league it's a small percentage of participants now here's what's interesting everybody can win it's a fair neutral platform and my incentive is to give as many tools as possible for people to do the right thing and do research and do all of that and what we do and what we do really well is we do take this sort of issue of excessive behaviors pretty seriously so for example in the 18 to 20 buckets i think um the data doesn't show dramatically [56:46](https://realalpha.app/v/l_Boz3KRtBQ/?t=3406) different behaviors but society tends to be worried about that we add a lot more throttling to the accounts what does that mean like you cannot basically lose too much in excess we add throttling and we start asking for additional verification that makes it so hard add a lot of friction for you to keep going or to keep going going into success and the reason we do that because the positive sides of this so when i ask the parents and the mom question and their 25 year old is training on cash what they get excited about is like they're actually getting smarter about the future they're smarter about the word because the alternatives they're spending time on instagram and social media where it's like extremists and all the hate and the constant brain rot and all these different things whereas here and they get addicted to that of course but they can't lose all their money on it i think they're losing a lot more they can lose their they can they turn their brain i mean i think i sometimes I'm losing my brain on that. I mean, you know, but like, I think there's all sorts of other issues there. But my point here is like, they're spending time getting smarter about the world, which I think is the whole premise of what we're building. Like, I think this is going to be the ultimate antidote to a lot of the polarization extremism we're seeing. Because, you know, these, these calibrated, well reasoned takes are not getting rewarded on social media, but they get rewarded in prediction markets. And that trains people over time to get a little bit smarter. And I want it to be a tool for that, especially for younger people, rather than a tool that like, I'm losing [58:00](https://realalpha.app/v/l_Boz3KRtBQ/?t=3480) all my money and i'm doing excessive behaviors and there's easy ways to do that which is like you can cap how much people are doing you can throttle these accounts um you know one of the things we do very well i think better than even some of the financial brokers or traditional brokers um we think we self-regulate we don't just do what regulation requires us to do we go above and beyond because i think about all the risks so miners for example we obviously they're banned and we do kyc and all these different things but the way that miners access all these [58:23](https://realalpha.app/v/l_Boz3KRtBQ/?t=3503) **Tarek Mansour:** platforms is they use their parents ids so one of the things we create is a parent portal where moms and parents can give us their ID and tell us don't let anyone else use it. That solves 95% [58:31](https://realalpha.app/v/l_Boz3KRtBQ/?t=3511) of the issue. And I think we're doing a great job. And the numbers show like, you know, the percentage of people that show these signs of these patterns of excessive behaviors or are losing excessively or losing in general on Kalshi is actually lower than options trading. And it's lower than any active trading of stocks. So if you buy a stock and hold it for five years, it's investing. But if you're trading in a daily basis, et cetera, 75, 80% of people lose. And I think people have not come to terms that there there are irresponsible behaviors in all these markets and the way to do it is basically you have to figure out how to flag these behaviors and basically get better at throttling them okay i guess my last question this this this um pod is a lot of ceos and founders listen to it you've had a really unusual like really long strange trip yeah one last piece of advice or tips for folks going through going through the desert i think that like I would say a few things, but like one, like really question really hard why you're doing it, you know, because the thing that you're like, if it's not for the company itself, the thing that you're hoping to get, I don't know if it's really there, which is a glamorous, you know. [59:45](https://realalpha.app/v/l_Boz3KRtBQ/?t=3585) I never found it the least, obviously financially rewarding at some point. For sure. There's many ways to do that these days. The opportunity cost is very high, right? Like if you, I mean, you can join a fast growing company. I mean, there's so many ways to do that. Right. Um, so I, I just think the monotech. A reward just feels like a... Risk adjusted is probably a stupid move. Yes. And if you adjust also for lifestyle and amount of pain, it gets pretty unattractive, right? Okay. Okay, your little brother comes to you and says, I want to start a company. What do you say? I just say, why? You push back? [1:00:20](https://realalpha.app/v/l_Boz3KRtBQ/?t=3620) Yeah, why? Like, explain. What is it? Like, oh, I want to be my own boss? You're not really your own boss. You've got a board. you've got you work for all your employees you work for everyone your users i mean if you're a good CEO you're basically you work for everybody yeah i mean i don't think it's that sort of sense of freedom is real in any way actually you're you're the least free right and the more it grows the less free you are right you know so like uh the second thing is like um i really believe in the sort of theory like i really strongly believe in the in the in the theory of like um It has to be true to you. [1:00:57](https://realalpha.app/v/l_Boz3KRtBQ/?t=3657) It's going to be very hard to build a company, market a product, build a product that is not you. It's very hard. I honestly don't see how that works. And it's so interesting because every time you see a big company and then you meet the founder or the CEO of that company, you'd probably agree with me on this. It's shocking. Yes. The office is them. If you meet them, you're like, I totally understand why that company is the way it is. right and and so and i i feel like people i don't know i feel like that's not put into practice enough does that make sense like i think people just try to you know figure out all the right ways to do things i just i mean i wish there was but i if there was and everybody's a really good quote be yourself everyone else has taken you're definitely yourself thanks for coming on thank thanks a lot for congrats on all your success thanks so much for having that's great okay hope everybody liked that. I really enjoyed talking to him. It's the second time I met him. He's a gem. [1:01:55](https://realalpha.app/v/l_Boz3KRtBQ/?t=3715) A couple of my takeaways. Holy crap, is he mission driven. He had a mission of how we wanted to see the world change. And the company was just like, okay, we're going to build a company to pull that mission off. People talk about mission a lot, very much in his case. It rhymes with kind of how HubSpot started. Our vision mission was we wanted to change marketing from outbound to inbound. And we just were like, oh, we need to create a company to pull that off. It wasn't originally a company. It was an idea. So I like that. And I like founders who are, he's very obsessive. And Very mission driven. I feel like today with startups, everyone's trying to win Twitter for the day and sometimes making short term decisions. The thing I like about Kalshi and the thing I really like about SpaceX is they made some big foundational bets and were super patient and were really rewarded once those things paid off. And I think more founders can learn from that. Last thing I would say is he's got a unique relationship with Luana, his co-founder. [1:02:58](https://realalpha.app/v/l_Boz3KRtBQ/?t=3778) Luana's the kind of organized one and very risk-seeking. And he's a little bit all over the place, and he's risk-averse. It was the exact opposite of what I thought those two relationships were, but it's very much 1 plus 1 equals 3. It's reminding me of my relationship with Dharmesh and how complementary the two are. Hope you liked it. You