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Taking His Talents to Miami Beach
Keith Rabois just moved to South Florida. Now he wants Silicon Valley to join him.
Keith Rabois is ubiquitous these days.
He cut early checks in Airbnb and DoorDash, which both went public in the same week this December. He co-founded Opendoor, which is now publicly traded thanks to one of Chamath Palihapitiya’s SPACs. DoorDash, Airbnb, and Opendoor are worth $50 billion, $95 billion, and roughly $15 billion respectively. Rabois also sits on the board of Affirm, a soon-to-be public company founded by fellow PayPal mafia member Max Levchin. Don’t forget his early check in Wish either. And Rabois has a strong stable of companies down the pike. Corporate credit card company Ramp, one of his investments, just announced a funding round this month, for instance.
Rabois moved to Founders Fund in 2019 after six years at Khosla Ventures, where he was the most high-profile investor after the guy with his name on the door. Unlike Founders Fund – which bet on Postmates while professing to believe in monopoly businesses – Rabois made the right pick and invested in DoorDash’s seed round, along with CRV. These days, Rabois is among a triumvirate of dominant partners at Founders Fund, which also includes Peter Thiel and Brian Singerman.
Rabois’ investments aren’t the only reason he seems to be everywhere these days. He tweets constantly. He’s fiery and confrontation happy. He makes predictions wildly and tweets things like, “i know more about residential real estate that [sic] probably any one person in the US.” He’s too comfortable embracing Trumpian semantic stylings for my taste. His protégé Delian Asparouhov and Founders Fund VP Michael Solana seem to share Rabois’ contempt for orthodoxies and his combative inclinations.
But I’m perhaps most fascinated by Rabois right now because of his decision to move to Miami and to immediately champion it as a new home for the technology industry. So, I texted him this week, asking if he’d give me an interview. He told me he would if he could finish up a meeting early. He’s super busy these days. “I am like a full service moving agent for Miami,” he wrote. “I will go house shopping for people.” I replied that he needed to “do things that don’t scale to get the startup scene going clearly.” He responded, “Yes :) YC for Miami.”
We talked less than two weeks into his move. “I’ve met more people in the last 12 days than the last nine months in San Francisco,” Rabois said. He doesn’t seem particularly worried about the pandemic. “If a founder wants to meet in person, I’m perfectly fine meeting with them,” he said.
Rabois signed into our Zoom chat wearing a Barry’s Bootcamp shirt. He was leaning over an iPad in his new $28.9 million Miami Beach waterfront home. The 15,000-square-foot house includes a 5,600-gallon saltwater aquarium. I could see a bulbous modern art-looking chandelier in the background and big windows.
Rabois told me that he’s in the process of selling his home in San Francisco and that he would live exclusively in Miami. He said that he and his husband, Jacob Helberg, started “researching where outside of California we wanted to move to … we concluded that California is a mess and likely to get increasingly worse. So our date night activity was surfing Zillow across the U.S.”
(Shervin Pishevar, who had(?) been persona non grata after sexual misconduct allegations, recently hosted a dinner party in Miami. Pishevar tweeted photos from the dinner, which included Rabois, Emil Michael, Alexis Ohanian, and the Mayor of Miami, Francis Suarez.)
Rabois’ description of the process of selecting Miami as his new home sounded a bit like an investor weighing which company to back in a hot new category. He said that Jack Abraham, founder of early stage investment firm Atomic, helped sell him on Miami. “He was the seed investor and I marked up his A,” Rabois said.
It will be interesting if Rabois’ city-shopping mentality trickles down to the merely rich. That attitude has struck some on Twitter as dismissive of each city’s particular local culture. But I suspect this posture becomes the new normal for metropolitan elites.
“It was obvious from a quality-of-life perspective and cultural perspective that this was the best choice, but from a professional perspective it was really Jack and Atomic convincing me that we could build real companies here and this could be a professionally even better opportunity.”
I replied, “Some people are laughing, saying that it’s easier to move to Florida in the winter.”
“I think that’s ridiculous,” he said, while giving me a dead-serious argument. “I grew up in New Jersey. I’ve lived in DC and in New York through summers as an attorney where you had to wear a suit to work.... In the inner city you don’t get the refreshing wind and kind of relaxing cools you get from oceans. I actually think the summer here is much more tolerable than – certainly – D.C. and at least the really bad days in New York. The inner city, you get trapped with this really weird humidity, bouncing off the concrete and with no fresh air. Here with the ocean, you get more fresh air.”
I wondered if this was really a tax play dressed up as something more meaningful.
“Well, California is clearly overtaxed and over-regulated. I mean it’s the highest taxed state in the country, so that’s an empirically true statement. And there’s literally almost no goods and services you get from the tax payments, so that was definitely frustrating, and it was increasingly getting worse – the discrepancy between what we were paying and what we were getting,” he said. “We definitely filtered states by what I call a reasonable tax rate, but we considered Colorado with a 4.5% tax rate. We even looked at things like Virginia.”
But the pandemic really changed his thinking more than anything, he says. “If taxes were the only driver, we could have done this five or ten years ago,” he said. Before the pandemic, Rabois believed that the only “acceptable place for a highly ambitious VC and technology executive” was to live in the Bay Area. “What the pandemic clarified is that perhaps that thinking was erroneous. Maybe never true, but certainly less true than the perceived wisdom. Second, the pandemic removed or lowered the opportunity costs to try new places.”
I made the argument to Rabois that the Miami and Austin movements wouldn’t seem particularly meaningful until an entire traditional venture firm packed up and moved. For now, it just seems like people who have already made it. Joe Lonsdale is established enough to move to Austin. If you’re a nobody founder, the likeliest place to get a bunch of VCs fighting over you far and away – no contest – is San Francisco. Yes, the pandemic has muted that effect somewhat, but I believe it will return.
“My thesis on the best way to achieve that goal is just to start as an experiment, so I’ll move,” Rabois said. Founders Fund is building an office in Miami that Rabois expects to open sometime in 2021. “We’re signing a lease right now; we’re building out an office on par with our Bay Area office in terms of quality.” His partners will visit Miami and decide for themselves whether they’d want to live here.
Then Rabois dropped a fact that seemed to help explain some of his current soul searching about where he really wanted to live. “We hope that we can send our kids to public schools,” he said.
He took me by surprise. “You have kids?” I asked.
“We have two kids on the way,” he said. “So by the summer we’ll have two kids. So that was part of the filtering process. I went to public schools; I’d prefer my kids go to public schools. In San Francisco that’s not possible, there’s not a public school that’s reasonable.”
He’s not entirely sold on Miami schools today, but he thinks they can change. “I felt like if we had an engineering-based curriculum here, there would be a lot of appeal to successful Silicon Valley-types when they’re raising their family. I discussed this with the mayor once I got here – not before – and I think we’ll find some public support for building a science-based, engineering-based curriculum into the public schools.”
Rabois talks about public schools the way the caricature of a billionaire in a cartoon might. He seems to think that a well-run city should be amenable to altering the public-school curriculum to fit his particular worldview. I think he’s right to think that teaching children coding is smart and that there is a constituency of parents who share his outlook. But there’s definitely an insane level of rich-person hubris that within a month of moving to a new city, you’re asking the mayor to change the public school curriculum for your future children.
So, I couldn’t help asking Rabois if he is a billionaire – a nosy reporter sort of question.
I asked, sort of easing into the question, “Are you close to billionaire?”
He replied, “I have no idea.”
I said, “yes you do.”
“I actually don’t. I have no idea. I don’t track things like that,” he said. “Whatever shows up in my bank accounts shows up accidentally.… Who knows when that money will be real, but I don’t really measure that stuff. I measure, what is 2021 looking like? How many companies are going to be successful in 2021? What does 2022 look like? And how do I make decisions today?”
Incredulous, I replied, “You’re seriously telling me – you can say I just don’t want to answer – but you’re telling me you don’t know whether you’re a billionaire.”
He replied, “I actually don’t really know. I can guesstimate it, truthfully. Obviously, you can triangulate stuff. But I actually really don’t know.”
In fact-checking this piece, I gave Rabois another chance to explain himself. He reiterated that he doesn’t know his exact net worth since much of it is tied up in illiquid venture funds. With some prodding, he acknowledged that his liquid net worth is certainly below $1 billion.