Keith Rabois – This Week in Startups with Jason Calacanis (Part 2)

Check out the the This Week in Startups Episode Page & Show Notes

Key Takeaways

  • Keith doesn’t believe universal basic income is a good idea
    • “Self-worth and psychological happiness have been proven through many studies to be driven by work and satisfaction in producing things. If you give people money, and they don’t produce things and they don’t work, they wind up with a depressing life.”
  • It’s inevitable that we will see self-driving cars
  • One great piece of advice – Instead of focusing on which company to work for, go work for the person you can learn a lot from
  • A useful fitness goal – lowering your 2 minute recovery time
    • This is when you increase your heart rate as high as you can, and then stop doing whatever it was that raised your heart rate – you then see how low your heart rate drops in the following 2 minutes 

Check out the Podcast Notes for Part 1

Intro

  • Since the last interview, Keith Rabois (@Rabois) has left his position at Khosla Ventures and is now with a partner at Founders Fund
    • In the past, Keith has worked in senior positions at Paypal, LinkedIn, and Square; has led investments in companies like Stripe, YouTube, Palantir, and AirBnB; and started the company OpenDoor, which aims to transform the process of selling a home through technology
    • Keith has quite an impressive list of bosses throughout his career  Peter ThielMax LevchinReid HoffmanJack Dorsey, and Vinod Khosla

Keith’s Thoughts on Universal Basic Income

  • Sam Altman is a big proponent of this
    • “I think Sam is right 99% of the time, but on this one he’s 100% wrong”
  • Europe has tried different versions of this for quite some time
    • “The work ethic in Europe is awful. The unemployment rate in Europe is almost always awful (it’s around 20-30%).”
      • For comparison, the U.S. unemployment rate is 2-3% – “By definition, we have an unemployment rate that’s basically negligible now”
  • But the biggest thing wrong with the idea according to Keith:
    • “Self-worth and psychological happiness have been proven, through many studies, to be driven by work and satisfaction in producing things. If you give people money and they don’t produce things and they don’t work, they wind up with a depressing life.”
    • “The byproduct of your toil is what makes you human in many ways. If you just pay people not to work, you’re actually destroying their self-worth.”
  • “I also don’t believe robots and A.I. (artificial intelligence) are taking over everything”
    • Keith doesn’t believe the need for human labor is going away anytime soon, but the type of labor needed will probably shift
      • “I think technologies shifts will produce dislocations and different prioritization, but not make the concept of work go away”
      • “It’s not like 96% of the people who were farmers now don’t have jobs and are sitting home all day”

Self-Driving Cars

  • Keith has funded one autonomous driving company (it hasn’t been announced publicly yet)
    • “The progress is outstanding…they have a differentiated approach with an awesome founder”
  • ‘It’s INEVITABLE that we will see self-driving cars”
  • Roughly 40-70% of all accidents are caused by a lack of attention to the road (causing about 30-40k deaths in America per year)
    • “If you just eliminated distractions half of accidents would go away”
  • One thing Keith thinks should exist:
    • The ability for self-driving cars to gather data from our smartphones/smartwatches, which we carry around constantly – this would solve/mitigate the problem of cars hitting pedestrians
      • We actually do something similar in wars – all American troops wear a certain type of computer chip to eliminate deaths by friendly fire from above
      • (A message to all self-driving car startups – Keith and Jason actually want to fund an idea like this)

What advice does Keith have for young people starting out in tech?

  • Find a good mentor and choose your boss – don’t try to choose your company
    • Go work for the person you can learn the most from
    • A side benefit – Smart/talented people will want to take you along with them while they navigate towards interesting opportunities
  • Figure out what you can be extraordinary/excellent at
    • Eventually, you’ll be able to find startups that need that skill of yours to succeed

The Future

  • “Eventually the U.S. economy will cool”
    • The last 10 years have been great
    • “If you’ve grown up in a decade where the economy has been growing and jobs have been easy to get, you’re likely to forget that isn’t the natural state of affairs”
      • “If you’ve grown up only in a hot market where everything’s easy, it’s not totally your fault that you don’t understand that the world’s gonna change”
  • If Keith had to choose – Are things (overall) likely to get much better, or much worse? – he’d take the latter
    • “I don’t know what the cause will be, but here’s one possibility – the government has, in the Federal Reserve, a bunch of decision makers who have turned most of the dials already, so when there’s a blip, the tools at their disposal to modulate the blip have already been used. This means that the ability to soften the blow of some crisis isn’t available. We’ve already spent that capital. Hence, the reaction is going to be much more severe because we won’t be able to deaden the blow. That scares me.”
      • “The backup systems have already been spent, and therefore we’re more exposed then may be obvious at a superficial level.”

Acquisitions

  • Jason thinks Apple should be buying up more companies with all their cash
    • “Truthfully, they have under invested in acquisitions” – Keith
    • “They could have bought Tesla! They still could for $75 billion!” – Jason
      • “Can you imagine Tim Cook’s supply chain management, Elon’s vision, and the stores each having a Model 3 in them” – Jason
  • Google bought Youtube (for $1.65 billion) and Android (for an undisclosed amount) (which both greatly help them out today)
  • Facebook’s purchase of Instagram arguably saved the company
    • “Facebook would be pretty much toast…people would be talking about Facebook like Yahoo had they not bought Instagram” – Keith
    • (The purchase was for $1 billion)
    • Keith estimates that if Instagram was a publicly traded company today, it would be worth between $100-200 billion
  • Paypal was sold to eBay for ~$1.5 billion
    • It’s now worth ~$106 billion

Health/Fitness

  • Keith is a fan of Barry’s Bootvcamp
  • Keith has an Apple Watch and says he’s obsessed with lowering his 2-minute recovery
    • This is when you increase your heart rate as high as you can and then stop doing whatever it was that raised your heart rate – you then see how low your heart rate drops in the following 2 minutes 
    • “It’s the single greatest data point about how healthy you are”
      • What can you do to improve it? – Lots of high intensity interval training, running stairs, sprints etc.

These notes were edited by RoRoPa Editing Services

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