A Conversation with Keith Rabois on Everything (#648) | The Pomp Podcast

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Key Takeaways

  • For Keith Rabois to invest in you, your business needs to have a > 1% chance to change the world
  • Founders Fund launched OpenStore to create a wealth-generation opportunity around starting/growing your own business
    • Almost no businesses on Shopify are venture backable or debt-financeable
    • OpenStore will buy your Shopify business, giving you the opportunity for liquidation and access to life-changing money, which incentivizes continuous business creation
  • Miami has the potential to be the next Silicon Valley
    • The blending of technology and culture seems to be much more natural, and it is a more accepting and innovative environment
  • “We are in a very confrontational state with China and the biggest risk is to be in denial of the fact that China has an agenda that is unfriendly to the future of democracy” – Keith Rabois
  • America has lost so much trust as a result of Afghanistan that Pomp believes it would be very hard to convince this generation of people to go fight in a war
  • We need an official ‘partisan-ation’ of the media
    • Disclosing bias > eliminating bias

Intro

  • Keith Rabois (@rabois) is one of the most respected minds from Silicon Valley and is a General Partner at the Founders Fund. He has previously been involved as an investor and executive at companies including PayPal, LinkedIn, Slide, and Square. Pomp and Keith discuss his recent venture investments, geopolitical current events, and if Miami can be the next Silicon Valley.
  • Host: Anthony ‘Pomp’ Pompliano (@APompliano)

Founders Fund

  • How do you think about investing and portfolio construction with such a large fund?
    • Invest enough money in exchange for enough equity where they don’t have to raise another round of capital
      • Worked with DoorDash investment
      • Be involved with founders to align personal/business incentives
  • Knows emotionally within a year if a company is going to be a successful venture investment
    • Used to evaluate valuation increase and rate of increase as success metrics but lately hasn’t used it as a proxy for success in the given market conditions
    • There is so much opportunity for entrepreneurs to raise money now for it to be an effective metric
  • For Keith to invest in you, your business needs to have a > 1% chance to change the world
  • Started accelerated investing in crypto-focused companies (5-10) including one that plans to reinvent the music industry
    • Music fans will be much more involved collaboratively, economically, and socially with their favorite artists.

OpenStore

  • Almost no businesses on Shopify are venture backable or debt-financeable
  • Many businesses don’t have access to liquidity, Founders Fund launched OpenStore to create a wealth-generation opportunity around starting/growing your own business
    • Example: If you are a merchant on Shopify, you can sell (liquidate) your business to OpenStore rather than maintain it forever
    • Investing more in long-tail businesses rather than influencer based businesses
    • Shopify is more appealing because the merchant’s customer base is more organically grown rather than through standardized advertising like Amazon uses
    • OpenStore will run 100% of your business after they buy it through automation, templates, and scaling
      • Opportunity to continuously cross-pollinate products
      • Some brands will be more valuable than others

Miami

  • Keith Rabois operates in Miami and is a strong ambassador for Miami to become the next hub for technology and entrepreneurship:
    • The blending of technology and culture seems to be much more natural, and it is a more accepting and innovative environment
    • Good financial regulation environment for business operations
    • Ability to raise capital in Miami is easier
    • Experience a normal week in Miami, not just a weekend
      • Everyone is contagiously happy even during the week – the sun definitely helps
      • Miami is the epicenter of a variety of interests – tech, art, sports, fitness, food, etc

China

  • “We are in a very confrontational state with China and the biggest risk is to be in denial of the fact that China has an agenda that is unfriendly to the future of democracy” – Keith Rabois
  • The correlation of forces has never been closer to favoring China as they are presently
  • The one shared dimension in geopolitical negotiations is time
  • Capital markets issue – Chinese company creates a shell company in the Cayman Islands with identical IP to another company, the unknowing investor is most likely buying shares in the shell rather than the actual company
    • Keith believes the SEC will crack down on this
  • Keith Rabois and Founders Fund does no investing in China

Afghanistan

  • Debatable on what the exit strategy should have been, but the execution at a tactical level was “insane and naïve”Keith Rabois
  • The Left historically has had significant tolerances for abuses (against religion, sex, gender, etc) overseas
    • Rabois is baffled by the left’s consideration of the Taliban’s ability to run a country when their actions and abuses are so misaligned with our values
  • America has lost so much trust that Pomp believes it would be very hard to convince this generation of people to go fight in a war

Media

  • Gatekeepers have been removed as a result of technology and the media doesn’t like that – their monopoly on the control of information has been destroyed
  • We need an official ‘partisan-ation’ of the media
    • When the media masks or denies their bias, it’s unfair and not scalable
    • Disclosing bias > eliminating bias
Pomp Podcast : , , , ,
Notes By Drew Waterstreet

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