Founders in regulated spaces shouldn't expect linear progress. The journey is a psychologically taxing "desert" with no status updates, culminating in sudden "big bang moments" of approval or rejection. This uncertainty, where years of work might yield nothing, is the primary challenge, not the work itself.
In highly dynamic and unstructured startup environments, hiring for high potential ("slope") is more effective than hiring for deep experience ("intercept"). Experienced hires from structured companies often perceive the environment as chaotic and fail to adapt, whereas high-slope individuals see it as normal and thrive.
The practical reason to ban insider trading is to preserve market health. Beyond moral fairness, if participants believe a market is rigged, those without an informational edge will stop trading. This exodus destroys liquidity and ultimately causes the market to fail, making fairness a requirement for survival.
The psychological weight of founder responsibility can be immense. Kalshi's CEO, who grew up during a war in Lebanon, describes the period of layoffs and regulatory failure as more painful. This was due to the intense, personal feeling of shame and of letting down a team that had placed their trust in him.
To achieve massive output with a small team (~127 people), Kalshi relies on a few core principles. The founders set a relentless work pace, maintain a flat organization with many direct reports, and dynamically assign talent to the company's biggest problems rather than adhering to a rigid org chart.
To launch a two-sided marketplace, you need a powerful catalyst to attract both supply and demand at the same time. For Kalshi's prediction markets, this was major elections. Such an event must be a strong enough driving force to get a critical mass of users to show up simultaneously, creating a self-sustaining chemical reaction.
For a heavily regulated startup, when an intransigent regulator blocks your core mission, the only path forward may be to embrace an extreme anti-pattern: suing them. Kalshi, a 20-person startup, sued the CFTC because it was their last shot at survival, despite warnings it would lead to a "death by a thousand paper cuts."
Kalshi's lawsuit clarified the distinction between a financial market and gambling. It hinges on two points: 1) having an open, peer-to-peer market structure instead of a "house" that profits from customer losses, and 2) trading on naturally occurring events (like elections or weather) rather than artificially created risks (like a dice roll).
Kalshi's core insight came from observing Wall Street's flawed approach to event-based trading. Traders incorrectly used proxies like shorting the S&P 500 to bet on Trump's 2016 election. They were trading the market's unpredictable *reaction* to an event, rather than the event itself, creating a massive opportunity for a direct event marketplace.