
May 20, 2021
Keith Rabois on Miami and Company-Building in 2021 | Village Global’s Venture Stories with Erik Torenberg
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Key Takeaways
- The biggest question for Keith when considering Miami was “Can we build a technology hub?”
- People who moved to Miami have reported being happier
- Looking at the history of startup ecosystems you can reverse-engineer some of their common ingredients
- You need a mix of different skills (investors, designers, coders, and VCs)
- It is usually a bottom-up dynamic, so you can’t control it from the top
- You can try putting the ingredients together and see what happens
- Once you get initial momentum, you need to leverage network effects to maintain it or amplify it
- Keith prefers to build his teams in the same location, especially in the early days
- Especially for young people, the workplace provides the opportunity to socialize, which they wouldn’t get remotely
- Sharing the physical space opens to the opportunity of learning by osmosis, which would be hard to do remotely
- Just as startups emulate other successful companies, if Miami’s mayor does well, we’ll see more mayors doing the same thing
Intro
- Keith Rabois (@rabois) is a member of the Paypal Mafia, the founder of Opendoor, and a General Partner at Founders Fund
- Host: Erik Torenberg (@eriktorenberg)
- In this chat, Keith Rabois talks about moving to Miami, creating a startup ecosystem, and building a company in today’s environment
Moving to Miami
- Keith had been frustrated with California for a while but hadn’t considered moving until the pandemic hit
- The biggest question for Keith when considering Miami was “Can we build a technology hub?”
- While Miami provides a competitive advantage to start entertainment and consumer-oriented companies, it is also a great place for technology
- There already are robotics and database companies in Miami
- While Miami provides a competitive advantage to start entertainment and consumer-oriented companies, it is also a great place for technology
- People who moved to Miami have reported being happier
- Because of its weather, cuisine, activities, and the way the city handled COVID
- “You can’t put a price on your happiness” Peter Thiel
- When making job offers for his new startup, OpenStore, Keith found that most people were happy to move to Miami from the Bay Area
What Does It Take to Get a Startup Ecosystem Off the Ground?
- For a long time, people talked about the value of clustering and how hard it is to create new startup ecosystems
- Looking at the history of startup ecosystems you can reverse-engineer some of their common ingredients
- You need a mix of different skills (investors, designers, coders, and VCs)
- It is usually a bottom-up dynamic, so you can’t control it from the top
- You can try putting the ingredients together and see what happens
- Twitter proved to be a powerful tool for social mobilization
- Keith’s announcement to move to Miami blew up on Twitter sparked lots of interest
- Even Miami’s mayor responded, clearly welcoming technologists to move there
- This caused even more people to move there
- Once you get initial momentum, you need to leverage network effects to maintain it or amplify it
- Each person who moves to Miami can encourage some friends to do the same
Distributed vs Co-located Teams
- There is no one size fits all
- Different companies in different industries will have different needs
- We will see some examples of best practices for each model
- Moving back and forth with different models can’t work well
- You have to make a decision of how you want to build your team and stick to it
- Keith prefers to build his teams in the same location, especially in the early days
- Especially for young people, the workplace provides the opportunity to socialize, which they wouldn’t get remotely
- Sharing the physical space opens to the opportunity of learning by osmosis, which would be hard to do remotely
The Future of Cities
- The data of people leaving cities has been surely affected by COVID-related policies and the changes may not be as dramatic in the long term
- There will surely be more emphasis on open, green spaces, and gyms
- Just as startups emulate other successful companies, if Miami’s mayor does well, we’ll see more mayors doing the same thing
- Finding the balance between bringing new people in and keeping existing people happy
- Refusing to build housing in the Bay area caused prices to keep rising
- Miami is still 20-25% built, and there is still room to accommodate more people
- It will probably take a crisis before San Francisco makes significant changes
Additional Notes
- OpenStore buys up small Shopify businesses providing immediate liquidity to its owners
- When recruiting people, Keith advises them to spend at least one to three weeks in Miami
- Spending just a weekend will feel like a vacation
- It won’t get you a real feeling of what it’s like living there
- Spending just a weekend will feel like a vacation