0:17

I'm Kara swisher and you're listening to sway. I'm

0:19

taping IRL in Miami today.

0:21

With one of my oldest texts sparring partners,

0:23

Keith rabois. a He's of

0:26

the PayPal Mafia, the cabal of billionaires

0:28

excetra that includes Peter teal Elon

0:30

Musk every Hoffman after

0:33

PayPal or boy held executive roles at

0:35

companies like LinkedIn and square

0:37

and then pivoted to the world Adventure Capital

0:39

first, working with khosla Ventures. and

0:41

now with the founders fund run by his old

0:43

pal. Peter Thiel, even

0:45

is B PC or a boy had continued to found

0:48

Like the real estate platform open door

0:50

and the e-commerce Company open store.

0:52

So I i wanted to chat to him about

0:54

his approach to investing vs. Found in kills

0:57

announcement that he's leaving the board of meta and generally

0:59

all things Silicon Valley even

1:01

though he's one of the key architect for moving, Tech

1:04

out of California and into Florida

1:06

Keys for boy, welcome to sway. Pleasure

1:09

to be here. Welcome to I Miami. Thank you. was

1:11

just complaining about the weather. It's a bit of chili here. You

1:14

promised. have degree as and. I'm degree

1:16

the infant. Okay, have you stay for another

1:18

day will have an eighty degrees and sunny? Okay good

1:21

congratulations. by the way becoming way father i

1:23

also had more children doing pandemic how

1:25

is that

1:25

Thank you, it's going great, yeah, how old are your

1:27

cat they're both seven months? You really

1:29

change your life. I know we've changed

1:31

locations, we have kids

1:34

runes shutting everything preventing

1:36

ourselves, right?

1:37

Absolutely, so let's talk about that, so you

1:40

defected hear how long have you been here? I knew

1:42

December tenth twenty twenty.

1:44

Then. Right after the pandemic started to

1:46

talk, I think as you love salmon, the you have a beautiful house,

1:48

and San Francisco talk about the move,

1:50

can sometimes I tease you I'm? Like eat, you

1:52

talk eleven how much you hate same as them like your girlfriend

1:55

broke up with you or mother on. didn't

1:57

deserve this, you are you going? I'd love it.

2:00

The area of the trash at their, but go ahead. Where the

2:02

world's changed, you know, added is her Cisco

2:04

professionally for twenty one year he did by.

2:06

This two thousand seventeen the city's

2:08

him and been a massive decay isn't crime

2:11

homelessness. The House you'd

2:13

always been an issue, the taxation

2:15

the regulation of the state police

2:17

has been problem for entrepreneurs and

2:20

for people who want to be successful. And.

2:22

So we decided to and in the covert policies,

2:25

heads and services her way into an extreme lockdown

2:27

mode masks, non scientific

2:29

behavior as explored, the rest of the

2:31

country realized that. There were smarter people

2:34

with better policies all across or

2:36

house like that. Policies

2:38

that are actually better okay students and it'll be better.

2:41

So. We decide to vote with R&C and

2:43

she'll have original foundation of his country has

2:45

no way to get better policies this gives

2:47

you the choice isn't and to have fifty. States,

2:49

all of laboratories of democracy, disease and

2:51

that pupils have emigrated to Florida because

2:54

they like to try, says here since last year, two hundred

2:56

twenty thousand people moving to Florida. midst

2:58

you know this Oscar, I say transfers and

3:01

capital. Is always

3:03

mobile. Entrepreneurs have been less mobile,

3:05

there's a reaction of network effects in the Bay

3:07

area, but the network effects of atrophy.

3:10

There was social scene of which you are quite active,

3:12

eminently. It might get me that requires networking

3:15

or be part of the job of venture capitalists are and entrepreneurs

3:17

to recruit with choice and so happy

3:19

that density town around you allows you to succeed

3:22

has not been or executive or sounder

3:24

or the seats. That

3:27

said it's downsides to network effects as well. The

3:29

network effects Castleberry complacency

3:32

and sort of monoculture stereotypical

3:34

in way of thinking that everybody conforms to and

3:37

the people who create the best companies tend

3:39

to have different views to divergent views.

3:42

There's. A reason why most people think these companies are stupid

3:45

or insane or impossible when they're founded every

3:47

one of the companies I buses and my

3:49

parents, my friends all thought we're. Crazy

3:52

from you tube to air (bnb) nobody

3:54

thought these were possible, nobody thought people

3:56

would work. That's a typical that's typical true. Right

3:59

and so that's it is. Imported though that

4:01

therefore founders be. A

4:03

buyer meant that doesn't reinforce

4:05

one. Simple. Way of thinking about

4:07

the world, you need diversity of thought

4:10

and the good news is where the network

4:12

of sacked tipsters in other places to build

4:14

a network this Miami I. Feel little

4:16

bit like Noah and building an arc of

4:18

I needed to entrepreneurs and needed to designers

4:21

to be season for them on this boat we're going

4:23

of Hemingway.

4:24

Though. It by doing there was tackling on him, I

4:26

am here before you die here, but that to let me get back to them,

4:28

he finishes every cisco, is that you a?

4:30

Part of that building that cancer you

4:32

were quite high up on the food chain, their it

4:35

provided you an atmosphere for success.

4:38

He did you have any? Any

4:41

feelings of gratitude towards that culture?

4:43

I don't think something chicken the t quite I don't

4:45

eurling's houses go contributed anything and everything was

4:48

always retarding success debate real

4:50

as a whole was little bit better off, so he built

4:52

power. The power to get I'll get

4:54

them talking about the whole there is only post two

4:56

thousand and ten the company's really started moving

4:59

to the city Francisco was never

5:01

designed. I wasn't intentionally

5:05

insulated San Google

5:14

Facebook Federal all down

5:16

there. So she doesn't have a lot of nurse

5:19

for social reasons, wanted to move to city.

5:21

I think the city really the culture

5:25

in actually to

5:27

support tag so think it

5:29

took a few years but not to be obvious and

5:31

became start the obvious when for so the mayor

5:34

as the who is protract died and

5:36

at the create box. They're not humorous,

5:38

filled very sauce by people who were anti tank.

5:41

I'm healthy was too kind to tech

5:43

and the a rest in peace, but I think

5:45

he was considered sort of attack.

5:47

Apologists to some.

5:48

I don't think of anything to apologize or an attack and

5:51

capitalism have built the foundations of

5:53

a lot of world's have improved every possible

5:56

aspect of modern life and so

5:58

does nothing to apologize if anything. Then. Be encouraging

6:00

more tax, fortunately Florida in Miami

6:02

specifically understand that the future

6:05

is be built by now intact

6:07

and they want to be the center of mass check

6:09

in capitalism to. "We looked at moving

6:11

are off his back and pay Paul two thousand two

6:13

to search Cisco, the largest since

6:16

disco based company was seen at, and

6:18

Sir Peter Chill said that's. ridiculous

6:20

We want to be bigger, more pointed, see that sort,

6:22

opry the companies from Cisco isn't it

6:24

wasn't so like great Twitter, yeah?

6:26

Then. Average started to insert just go

6:28

Twitter and gallium, the sugary made a lot

6:30

of sense yup was serving demographic

6:33

an urban demographics, she's very logical

6:36

derby the was founded the. City was also

6:38

makes sense sued the foundations, built

6:40

mostly by companies that had reason to be in San

6:42

cisco for that everybody started moving the

6:44

San Francisco for light proceed. Lifestyle

6:46

reasons with are realising how pathetic

6:48

all. San. Francisco would be to technologies

6:51

success and they've all escaped and runaway

6:53

within the California, you know, most of them are California,

6:56

I'll in California, I think you know things

6:58

think. People are not as bold and to curb it hit a

7:01

I was in his bold I'm did was not

7:03

willing to move until after coveted and

7:05

then that enlightened me. To new

7:08

options, Iris, others are just a trade'off, and

7:10

I was basically blindfolded,

7:13

recovered hit in a lot of people to experiment with

7:15

very low cost, low energy and

7:17

everything except. People can look at either convert

7:19

job, Mm, let's say Facebook Google

7:21

and try New City whether it's Denver Dallas

7:23

Austin. The next day. Then.

7:26

Out of New York, Miami, Nashville's

7:28

saga, wherever and they realize

7:31

there are places that were run much better with

7:33

better trade off between cost

7:35

and return to basically clover

7:37

really. Highlighted that you can't treat

7:39

people like citizens that are you have monopoly

7:41

on citizens are now customers, the

7:43

customers, the government, their customers, that the states

7:46

and are gonna look. At the value proposition

7:48

they receive just like when we'd buy products

7:51

is the best phone I can buy his price

7:53

worse when get out of it's and consumers

7:55

are. Now asking that question of their mayor's,

7:58

the mayor of Miami, the governor, Florida. Treat

8:00

citizens like customers, what can we offer

8:02

you, how can we help? That's their goal

8:05

and that's how they frame everything.

8:06

I. Don't see a lot of the big companies, though Apple still has

8:08

beautiful headquarters in California to Google's

8:10

continuing: "You have me it's famous campus, their

8:13

Netflix all the big. One's remain

8:15

in that Facebook has its famous campus,

8:18

they have dispersed their population, I guess.

8:21

In that way to what happens to them?

8:22

From your well, I think they're going to decay over

8:24

time and this is a healthy

8:26

thing in technology, the people who used

8:29

to being comments when you started the industry where while.

8:31

You wrote book about aol, we then you cover

8:34

Yahoo. And. Then you would cover,

8:36

you know, Microsoft and in most of the, and

8:38

I just move on from get Bogus a bus

8:40

to carcass, but the most common artifacts

8:42

of history and. Facebook eventually will be as

8:45

well, so I don't really care

8:47

of his company stay in California, want to build the next

8:49

generation here.

8:50

Most people pretend otherwise the tax

8:52

situation was also.

8:54

That supply was it is, and will we filtered,

8:56

seen that cancer with there's no state income

8:58

tax of Florida in California for

9:00

wealthy people charged basically charges thirteen

9:02

percent on top of the federal tax rates so basically

9:05

don't get to keep? Half. Of your money,

9:07

if you're wealthy in California, if I work

9:09

has the your for the government's and half the your for

9:11

myself, the government's control in my life

9:13

and that's is. Not acceptable for me and my family's

9:16

to always filtered cities in the you ask my

9:18

husband by had a couple criteria or

9:20

warm weather we wanted tax rate there

9:22

was. reasonable which we defined as sub five percent,

9:25

so many cities and states qualifies

9:27

we wanted international airport because I have

9:29

to travel for business and we need to novel and

9:32

it's" Fourth, we wanted some version of a cosmopolitan

9:34

cuisine is when she got to eat other

9:36

frustrate our restaurant's things to do. Then

9:39

I wanted to berries workout program, such a cool

9:41

guy decides to pull criteria the

9:43

and Miami's by far the best choice. How

9:45

would you call yourself conservative? Yeah,

9:47

I didn't identify as a cancer.

9:49

Right, so it's also politics you prefer

9:51

here at this moment in time.

9:52

I do, but also when think my friends

9:54

notice most the friends who moved from very

9:56

with the are not conservatives, this is and was a

9:59

find this recession. Sure. People

10:01

are allowed to have different views and you have

10:03

to have dialogue basically half the state voted

10:05

for Trump have voted for Biden, isn't it

10:07

so anyway you did you? Realize you're going to encounter

10:09

people hundreds of years as very refreshing

10:12

for people to expect to engage in have discussions

10:15

as opposed to just finger pointing.

10:16

I think that the adding that tech is liberals

10:19

and canard was a libertarian light as my.

10:21

But if you look at who to give their money to, it's Democrats

10:23

other than Peter.

10:24

Like that, show their fans will get to him in a minute

10:27

I touch, and there's far as you just referring

10:29

to, he said that Miami doesn't have the Stanford

10:32

mit can you have a tech utopia

10:34

here without the click?

10:35

Then. Powerhouse research in theater institutions,

10:37

while I believe a lot of people who power the tech revolution,

10:40

the barrier moved to the Bay area because there's ambitious

10:42

opportunities they weren't born and. Raised there so

10:45

mit right that arbitrage universities, cargo

10:47

champagne Illinois were more countries and max Levchin

10:50

or from San Sebastian'a job at

10:52

and steve from yesterday all like they'll move

10:54

though they're like people moved to hollywood is right what

10:56

think people will move here over time

10:59

we can build first rate There was critically important

11:01

to that in some. Some fields certain

11:03

people remember like Facebook wasn't built by Stanford

11:06

Harvard but the. good news

11:08

search particularly yeah obviously yahoo

11:10

and google both hide grad students mostly

11:13

building those companies but fundamentally

11:16

i think people overeat the importance of stanford

11:18

we will over time how first rate educational

11:20

institutions here

11:21

The what is the state of California due

11:24

to read, getting to get itself Syrian,

11:26

they are, is this just happened, I mean another?

11:28

The conceptual level framework, which is

11:30

treat your citizens I customer's target, have choices.

11:33

You have to get safety and crime under control,

11:35

I'm like people here will walk

11:37

out at night at ten p.m. by themselves, nobody

11:39

in San Francisco does that.

11:41

Then I just did that, the that somewhere in the

11:43

castro and where live. If get

11:45

goes down, you'd like.

11:46

It's not true that's not true that was actually

11:48

thrilled all the check for are gone, honestly, it was

11:50

not until reporting memories now there's

11:52

no real office at I'm telling

11:55

you it was lovely, it was lovely, I

11:57

love that city and. thrill where you can at least parts

11:59

of the street because"

12:00

When? I'm a little I don't have a confidence

12:02

in case let's go you are executive,

12:04

digital payments seventy square until two dozen thirteen

12:06

square is now block as in block. Chain

12:09

said doubling down and crypto currency see

12:11

object to receive very close to it,

12:13

to the pooh for anyone to mine between from took

12:16

little bit about with. As grew into

12:18

bitcoin prices plummeted from their family and November,

12:21

it's without six hundred billion dollars, Uppercut believes

12:23

press has risen in February and

12:25

can you talk little bit of? A how you look at

12:28

this all I saw last night was Super Bowl

12:30

is Crypto Bowl in L. and some of them are think

12:32

that the Larry David Bohm. Was good point base

12:34

think with their, so talk

12:36

about where that is now because you were very early

12:39

in one of the first people to. really i

12:41

think it was wenceslas are as who learned the first

12:43

but about a crypto currency and stuff

12:45

So. The way I think about crypto is it's

12:47

an ingredient to them and it is like any

12:50

technology it can be used

12:52

to enable and power new value

12:54

propositions, but I start. With what's the guy position

12:56

to a real person, the Railroad Yes Side funded

12:59

company called Royal, which is reinventing the music

13:01

industry uses crypto and tokens

13:03

under nice to me. Enable revenue

13:05

sharing of Rossi Syrian way that wouldn't have made

13:08

sense with traditional monetary system says

13:10

what we don't talk to the end user

13:12

like there were crypto company was. Like when

13:14

you're buying fraction of Calvin Harris song

13:16

and getting and of tea with Solve that gives you certain

13:18

rights it's. not the crypto

13:21

is like underneath the hood this is that's how i think

13:23

about all kinds of technology is very abbas perspective

13:26

didn't like the technology only serves human needs

13:28

would say what is the human needs and house

13:30

technology make this cheaper better faster

13:33

Then. Weary crypto going from your perspective, it's

13:35

just a means to an end I think that's what you're

13:37

essentially saying, how do you look at between

13:40

it's obvious a cycle of asset? That's it's

13:42

like gold or anything else presumably I

13:45

don't have you think that but where do you imagine

13:47

that? happening what would you imagined happening

13:50

imagined the space with miami has been one of the

13:52

Fine, he has been a center crypto people who

13:54

are crypto friend the are building new kept companies.

13:57

And. You can clear to me

13:59

where. I don't know the

14:01

future, usually don't try to predict the future

14:03

in any event anyway, really try

14:05

that find sounders think are exceptional, extraordinary

14:08

to the chief heroic things. In

14:10

are somewhat borderline, irrational fear of

14:12

but with big ambitions and so. The

14:15

me the founders working a crypto and has

14:17

goal in mind that would change the world and

14:19

I think they have the challenge skills pull it off

14:21

almond duster and. if they're interested

14:23

in healthcare which has nothing to do with crypto

14:26

if i think that the right dna to pull off the

14:28

innovations that i'm going to invest so

14:30

i'm agnostic The were

14:32

found or wants to go on in the desert,

14:34

the thousand nine. Look at the sort of the interest

14:37

in it, I mean. What? emerges is revealing

14:39

my yet how to people are voting with our feet just when you're

14:41

voting a move to Miami, they're ready with their seats

14:43

in Boston subbed out and that. Is using it

14:45

signaled that there's of their subjects

14:48

I have to pick the right company at the end

14:50

of the day? It. Is

14:52

one company that super successful crypto,

14:54

it doesn't do me any good to have invested in the other

14:56

don't, yeah, which out and your hands all

14:58

time, sir for. Example of you invested in most

15:01

automotive companies in it they weren't run

15:03

by person in the lamassoure was more money

15:05

of last twenty years since. they've

15:07

spacex back there now you could those based

15:09

company that doesn't require some

15:11

a quite as good as you on the spring two thousand

15:13

and three to five viewed funded somebody

15:15

that was an empty line Creating. A new

15:18

space company would been a disaster is worthy

15:20

what we call the, and one does this is this the one

15:22

person applied for this, all right, so

15:24

I. Don't know, but when it if I need a founder has in

15:27

crypto who can pull something interesting off

15:29

using crypto than OP's were would

15:31

love to be the master.

15:32

They're too many grifters around or feels

15:34

very grifter he sometimes winners the during

15:36

the wanted to let felt that way.

15:37

The so hiv of a gold rush in new

15:39

novel platform I. phone

15:42

to had some of the you imagine any new platform

15:44

yes want able something that's what i played

15:46

in make money and quickly before things

15:48

settle and stabilize isn't as isn't think there's

15:51

some truth to that right what was the sheep company

15:53

works assume that emphasizes

15:55

the company's a super focus our pilot he ever

15:58

after Yeah, that's right, yeah, that.

16:00

That you know you went on to do other things like.

16:02

but that was that facebook appetite

16:04

A rush, it was you were slide, we're applied your

16:06

yards we didn't do as well as you wanted.

16:09

Facebook: Let's talk about what's going on,

16:11

there is a stock market, is also seeing some

16:13

rumbling going on, it's important to lot of the

16:15

startups you find Robin Hood is lots of

16:18

lot of companies all the specs or down

16:20

below their. The everyone's down below

16:22

their initial public offering lot of them. Everybody

16:25

that Facebook was still use this is the first time at

16:27

eighteen year history shares dropped twenty two presents,

16:29

they stay blow, they haven't moved up very

16:31

much, very tiny little mouse mark

16:33

last twenty nine billion dollars in that, whether or not. There's

16:36

always that weren't could send of refund. We

16:40

will, as it added, as or it's so the beginning

16:42

of the downfall, what do you think, what we

16:44

when you were looking at, you are very early Facebook

16:47

person?

16:47

And I, of course, I did not have a sufficiently

16:49

didn't cite now that I didn't ever severely

16:52

regrets out the. What what do you imagine is

16:54

happening there? Randy's tarnished

16:56

on the core product, Yes, said that it

16:58

think that's an unsolvable problem for any

17:00

Instagram still has room to run. think

17:03

Mega is too far away if you think about

17:05

it. A metaphor I subscribe

17:08

to his mark as a lot like Bill Gates

17:10

mm which is pretty easily he

17:12

recognizes. business opportunity and

17:15

is maybe the best in the plot of executing

17:17

against sit by The

17:19

okay to never really on the cutting edge of technology

17:21

in the nuts, I see jobs, as you know, you well

17:24

used to make fun of them, he got used to, like, constantly

17:26

Lampoon, a caricature of isn't Sir Mark

17:29

is going to matter which party as technology.

17:32

Without. Skills to be cutting edge technology is

17:34

not what he does now, these book was paralyzed

17:37

new home and acer friendster my space, and I'm

17:39

very, very brilliantly executed

17:41

he's. An excellent his of his bill Evans

17:43

okay such cop on or, but it also means

17:45

that you have to understand your say so weaknesses matters

17:47

cutting edge technology. That seemed

17:50

that he has, in way, they promote

17:52

people, is not based on cutting edge technologies

17:54

many years have been very significant challenge

17:57

and because as macro environment A. Camp by the

17:59

way or the pro. Right? So typically

18:01

what you do and I'm sure market devil,

18:03

Saudi or than me about this is by

18:05

things my that have demonstrated the cutting

18:07

edge technology wants the right. Now that's nonstarter

18:10

for Facebook of high trapped in this

18:12

prison where they have the raunchy they're not creative

18:15

enough to innovate there without they've

18:17

never had camp and a. Camp either way out

18:19

behind the regulatory regime and in this

18:21

industry cinema history globally. Listen,

18:24

it's not just the. Then. Mystery know his identity

18:26

secret is gonna be even more matter

18:29

of hours under Trump, it's out as dinner I'm

18:31

sorry about what are absolutely there's no that's why there's no. Way

18:33

I would have to wait for a real life is done any favors,

18:35

the I can't really wait for an election or to

18:37

train.

18:38

How impactful was the how in testimony

18:40

and the other everything else?

18:42

Round. Damn hard to tell, I think

18:44

that would they really hard at a political level

18:46

is they have no friends on the right now is

18:49

the end of the last two", he. Said for other reasons

18:51

and so we have know how that are like some very

18:53

much and probably not, but fundamentally

18:55

don't have allies on either side, it's really hard

18:57

to build. A foundation

19:00

for your agenda and they really have

19:02

alienated, you know, my friends are the raid,

19:04

and it's very obvious in the public domain the

19:06

last, some my face much. The and other

19:09

tech companies to. That's true too, and

19:11

so I think that also start starving them a talents

19:13

or it's very hard to recruit for the best and brightest of the

19:15

next generation with these issues

19:18

of.

19:18

Then. Couple things that this going with them also Apple's

19:20

is become their regulator, essentially with

19:22

the privacy settings I think they're

19:24

overreach on privacy, is very apparent

19:26

to people think they. Definitely were reached apps

19:29

and then you have the matter investment, do

19:31

you think it's worth doing that, would you do that as you

19:33

are him?

19:34

I would only do it if felt had the team those

19:36

best situate and apply it to succeed, yes,

19:39

so, for example, up a high summer, the right ingredients

19:41

losses or into used to, but saw yes, sir.

19:43

Managed to say pretty innovative for bunch of older. Put

19:46

another way to think about his Amazon would

19:48

be very good at creating bad at either,

19:51

are now I was a wonderful company well

19:53

raw and, you know, incredibly successful,

19:55

but it's high your target and your skills

19:58

to gather exact suit of recess. That

20:00

while Apple have a large of large

20:03

precision of money, possibly

20:05

death flags, but they would have to change my students.

20:08

With the purchase of activity. It's. Not crazy

20:10

idea actually deserves to use cases of

20:12

value proposition: lot of things have started

20:14

with gaming or sports, yes, they become mainstream

20:17

products like Direct T.V. v started. With sports

20:19

and so I don't think it's a crazy strategy

20:21

of for Microsoft to try.

20:23

The to enter any could be small companies

20:26

like Snap Chat, another survey.

20:27

The reaction of Israeli Korean you

20:29

don't actually have been showed some flair of

20:31

wanting to get and destruction years

20:33

ago with even spectacle.

20:35

Any? Still doing, and I just saw the recent ones, so

20:37

you imagine what would happen to accompany them

20:39

like "Get like medic", as your friend

20:41

Peter Teal just left the board. To focus

20:44

on getting Trump Republicans elected to midterms

20:46

and let any thoughts on that and why you think

20:48

she last?

20:49

I haven't discussed it with Peter, think it's solely

20:52

about time allocation seasons like after

20:54

x years. There's. Other things you are services

20:57

time and, including us, is part driver firmly

20:59

believe that he knew investment, yeah, rising

21:01

city on all divestment smite right so

21:03

just tired as it or. Was like just seeing

21:06

or so years and there's an opportunity

21:08

cost to serve in the board of a public company isn't

21:10

we're doing early stage of us, they would see what. We do

21:12

it sound response every public on the board,

21:14

Ahmad. Hamza, the price

21:16

of not find in the next generation

21:19

seed investment. The about one

21:21

public board and it actually does can see

21:23

my time in, I may be missing something out. The

21:25

be wanting to do a lot of. Medical staff to, yeah.

21:27

That's right how dangerous outside

21:30

of work to and.

21:31

The get his money away to the a van seeking

21:33

at showed fine anyway,

21:35

and, so you is you think it's

21:37

just he says moving on

21:39

I suspect your haven't had a direct conversation with him about

21:41

it, but by gases like he just

21:43

wants all his time differently, okay?

21:45

And what happens and to that company because that

21:47

that's I think a lot of people are good

21:50

at, she would have the each of them, do you imagine, let's

21:52

do Apple and am the to that?

21:54

Apple has one major dependency was

21:56

is China. It's becoming a geo

21:58

global political.

22:00

Rescue Boat, their supply chain and

22:02

just the politics in a perception of will

22:04

the American government will the American people allow

22:06

company like Apple? The build stuff

22:08

in China might. That is unclear.

22:11

And we're gonna have increasing hostilities towards

22:13

China one way or the other and said

22:16

Dad is the biggest risk for Apple in the

22:18

next one to three years and how do they manage

22:20

that in any knowledge it's unclear? What

22:22

about a Netflix you mentioned that

22:25

that's what? Netflix. I think in their core business

22:27

has real challenges: real competition, it's

22:29

a gardener road, yeah, there are advantages

22:31

are eroding that up on one side each be on the other

22:33

side. The data advantage he has

22:35

unlimited the holiday to advantage when they started

22:38

producing content, laughing everybody, but their

22:40

that there's no longer quite good enough. And

22:43

sure, I think he needs you think

22:45

about moving into potential

22:47

hardware.

22:48

potentially modern, a broader

22:50

view of entertainment. They've done that

22:52

before they started obviously sending DVDs

22:54

Susan innovate and then they started the other

22:56

programming streaming, and then

22:58

they started original content to the have the history

23:01

of reinventing themselves.

23:02

Yes, and they're quite good at it, I think they always seem

23:04

to make the choice as Google Alphabet

23:06

slash your goal.

23:08

The basically monopoly business and,

23:12

What? The next act is unclear,

23:14

search isn't going away, but it's not the end/all

23:16

be/all as you may know when you go to like

23:18

a store in the real world, you. Walk into the

23:20

store may be planning to buy one thing but you wind

23:22

up buying five things Google, doesn't

23:25

know how to satisfy that impulse

23:27

like where things are marketed. To you when people

23:29

merchandise yeah and sue they

23:31

need to find growth engine? and

23:33

i don't know what that's going to be that right now they have a monopoly

23:36

they have great monopoly now and being

23:38

eroded it's about as good about monopoly is

23:40

exists in tax rate yeah I would say regulations

23:42

they're big. regulation but they're not going to have serious

23:45

regulation of you ask it's going to handicap there for

23:47

business may be outside, you ask, but

23:49

then you can look at the allocation of the revenue and

23:51

yell at them as as.

24:04

If you liked this interview and want to hear others follow

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24:17

More with new family after the birth.

24:30

Then. Of a long history in venture capital, your partner and

24:32

founder sandwiches feel firms

24:34

my producer was recently talked to some better to Apple's,

24:36

he basically said venture capital today is would. Banking

24:39

laws in the two thousands wasn't compliment,

24:41

easy money from ideal produce, and

24:43

can you talk about the current state of venture capital how

24:45

it's changed because there's money everywhere? There is,

24:47

and there's all kinds of new, innovative ways to raise money

24:50

there.

24:50

His agenda day: "I think

24:52

of my job is being primarily of consigliere,

24:54

a for founder and the been doing

24:56

of couple advice is still very rare

24:58

and on March scale yes there's time.

25:01

These incredible wanna time she gives

25:03

you some advice to well clots dollars

25:06

but. insofar as you're in the business of doing that

25:08

there's no competition or it's very few your next

25:10

three to five ci by compete with yeah that's it in

25:12

the world was partially like being a pop psychologist

25:15

also consigliere Free itself, what's

25:17

the problem there to the?

25:18

I'm. What what is happening like banking,

25:20

I think that is a fair statement is

25:22

there's vertical integration, sir everybody

25:25

is becoming full stockbridge or from

25:27

Z financing series a fine. And nine

25:29

traditional venture couple series A Beats

25:32

into gross out below a "We are the

25:34

same", we write one nine dollar

25:36

checks name, we write two hundred million

25:38

dollar checks in. The same week since and

25:40

so, if you're not sign that for

25:42

the vertically integrated and some heat for seat,

25:44

find your live once you million dollars

25:47

and power money into. A great company

25:49

had two hundred three hundred mode, are clips you're

25:52

going to get eclipse, and to that's what happened

25:54

a banking he does, specialized pay us busy,

25:56

disappeared and so. Everybody became

25:58

large bank or they lost. Basically.

26:00

The market share and your adventure that

26:02

is definitely habit is the people we can

26:04

be with, have glorified and they have seat

26:06

fight bright, see you have to do. We have viewing

26:08

public no, I don't think that talk

26:11

about that, and at we have no desire to be a public

26:13

company, isn't the other firms may try

26:15

it. There be interesting to watch.

26:17

I don't know what the benefits realistically

26:20

are other than more capital.

26:22

The last problem we have a sound respond

26:25

is we don't need more capital of anything

26:27

I say grants you figure is what you're talking about, basically,

26:29

with a virtue of the republic is just like it is for

26:31

his organization as he gets in capital resources,

26:33

you. The bigger is the way Venture Capital of. Going

26:36

unfortunately, yes, for now, and I don't

26:38

think that's healthy, my, think there's only

26:40

so many sounders that you want you and are since

26:42

and giving them extra money. Maybe

26:45

makes things worse in any other doesn't make things better,

26:47

yeah, so would rather than scarcer

26:49

with capital.

26:51

They're more promiscuous, are probably

26:53

already happening there, might it is? Round about

26:55

to have been there. We. Are some countries with

26:57

high burn rate even prior

26:59

routes raised at high valuations

27:01

based upon the player Mom gets where the

27:03

company doesn't have a lot of levers to control

27:05

the? Burn rate sauce in his and does

27:07

your area reprice uri massively into

27:09

be very painful experiencing, so I was just

27:11

something someone pretty smart New Tynemouth that

27:14

think you can. See, it left to right now, starting a while

27:16

to get into the public to make to we're not going to be

27:18

cool you to write about these are our nest you.

27:20

Never liked to have already heard about it of he died,

27:22

and more, you know, although the radar yes, by the

27:25

desert or seep into the ether.

27:26

One hundred percent, so he told me in two

27:28

thousand and eighteen invest in founders and get

27:30

it right thirty to forty percent of the time

27:32

with your average these days.

27:34

Average and venture is hobbies sub ten percent

27:37

of one percent. The me as a baseball.

27:39

You're a hall of fame, it's you could do anything close

27:41

to thirty to forty percent success rate at early

27:43

stage investing.

27:45

The time you're looking to growth, I should be eighty percent

27:47

plus correct this affinity to be

27:49

to make the economics work mind, but what do

27:51

is find the proverbial two kids and a garage

27:54

they have keynote jack and nothing else. It's

27:56

real, did you die? Twenty thirty

27:58

forty percent of the time correctly. Then. He's

28:00

pretty magical and.

28:01

Then the percentage you get now when you do.

28:03

These women were assured the way it works,

28:05

the market has shifted, so entrepreneurs have a lot

28:07

more powerfully dance or the when I was growing

28:09

up as he is not spinner when you

28:12

were first covering Silicon Valley. Often

28:14

disease with all forty percent of the company

28:17

that went down to twenty five,

28:19

it it's windy and the last two years

28:21

is more oxygen. The only and that's what

28:23

you think you. Yes, did, think you

28:25

can do the math different way there's different

28:27

strategies that one can legitimately

28:29

justified.

28:31

You have to be have a fairly concentrated position

28:34

in successful companies, are that because

28:36

the funds are so long?

28:37

Then that say we had it our last find

28:40

roughly four billion dollars in venture growth

28:42

and. The maker up his hobby, we did

28:44

it turned out to, like, five six

28:46

sacks, more money to that site,

28:48

twenty billion dollars of returns,

28:51

and let's say we only ten percent.

28:54

That means we need to be involved in copies, a crate two

28:56

hundred billion dollars of value in two and half years, and

28:58

I pretty damn which algae. That is very challenging

29:00

unless you get one that there's. The radio one

29:02

that's. Hundreds of go install like

29:04

exit it because very few effect.

29:06

You. Know am one of the things that can

29:08

happen as you're obviously was the trial of Elizabeth

29:11

Holmes that a lot of people said it was an indictment, Silicon

29:13

Valley. In the I did not think this

29:15

is that a fake it till you make it culture, I was like

29:17

she wasn't really a tech company but all rights

29:20

and what you. Think did cast out

29:22

over the valley or is it just nothing to do with I'm

29:24

using Southern Belle broadly sure?

29:26

I think it's called the Remove vex exit and

29:28

it's a testament to the called is like an alley be the. All.

29:30

Of successful masters, I know that normally

29:32

would invest in a company like hers pass

29:35

very aggressively other region's editorial on

29:37

and on the only investors to have

29:39

any note on. Her captive, road very

29:41

small checks in personally season, which typically

29:43

the venture partner at like one on foreigners

29:45

on it as personally. It's sign

29:48

is bag of negative sumo that the fun doesn't want

29:50

to invest much him drapers about the only

29:52

percent isn't that would be reputable

29:54

source of all person that invested in her top

29:56

table and so is not as. The

29:59

other people to aren't. Looking. For companies like

30:01

her's right, but anybody who understood

30:04

rudimentary chemistry knew that at least the

30:06

highest level vision she was pitching was impossible,

30:08

all the chess you describe it cannot be. done in one

30:10

box, guess you could have done half of it

30:12

in one box, maybe sooner, Cetera, but

30:15

this case you could actually very

30:17

specific principles that would actually be. violated

30:20

that would require revolutionizing the entire understanding

30:22

of chemistry, the world so she doesn't represent anything

30:24

I had been by, you know, yeah, deserves

30:27

a look at are boarded arrest me. There are political

30:29

type, yes, they are, that is not normal, second

30:31

I was younger adults.

30:33

Another. Topic or theme professors, he Blank,

30:35

said the first semi see a venture capital

30:37

was prosecuted for failing to uphold their duty

30:39

as board member, Your Vinci Silicon Valley Transfer,

30:41

overnights. All it takes is one B.C. doing

30:43

perp walk and ever gets the message irresponsibly

30:45

have legal duty to do things that are bad for society

30:47

you call to accounts. To great with him.

30:50

I. Do think Silicon Valley emulates

30:52

have been positively and negatively, isn't

30:54

I talked about the monoculture where people reflexively

30:57

copy things like they got a great team every cop

30:59

integrating but I've? Met you through from for from hosts,

31:01

so if someone were to be prosecuted for

31:03

some behavior, I think it would have the ball

31:05

thoughts.

31:07

Is there anything you see problematic until the

31:09

money so should be processors, companies that you've

31:11

gotten this is a problem

31:13

or that with that sort of an outlier?

31:15

There's definitely under the radar there must

31:17

be fraught like on his saga valleys nada

31:19

removed from the norm all

31:21

families of humans there's. enough

31:23

of my companies have enough founders that

31:25

you're going to have a representative sample to some

31:28

extent of society The and

31:30

adventurer one is the

31:32

dynamics because we are looking for thirty

31:35

forty percent success rate is. It's

31:37

not terrible by these money, sometimes in fact,

31:39

I want to lose money sometimes means I'm taking enough

31:41

risk of never lost money, would clearly

31:43

not be do my job. Your don't want

31:45

to over scrutinize things too

31:47

much. It's not my job to

31:49

overstate nice things my of he's definitely care

31:51

about. Net net she'd put one hundred

31:54

billion dollars invested in companies in

31:56

a retarded billion and in their happy if I ever

31:58

saw hundred million it doesn't return. The older was

32:00

a that they're very unhappy with the.

32:02

I don't want to be spending all my time asking

32:04

too many questions arise because it's not

32:06

my job, my job isn't to be perfect, my

32:08

appeased, give me the money, don't want me to be over for his

32:10

part.

32:11

So when you're thinking about these investments,

32:13

am using ongoing like subsidizing

32:16

and ooh burn. Competitive

32:18

yet still have the made money is

32:20

still important these unrealistic prices

32:22

and stuff like that you see that happening again or with

32:24

that in a moment.

32:25

A. Might have been a moment I've never been that way either

32:27

capitalization (see from the very beginning)

32:30

I'm always looking at the pay back of dollar

32:32

help us is accepted box. And I'm

32:34

always have said personally in funding companies

32:36

that have very efficient return because I choose

32:38

to me that Israel product market set sousa

32:40

you shouldn't have to subsidize consumers.

32:43

If consumers find your product to be valuable,

32:45

since they should be willing to pay for my A for the

32:47

I phone as expensive as the

32:49

odyssey find it viable right and. So think

32:51

founders need to go products that consumers

32:53

are willing to pay for. The at the correct price,

32:55

not as. We don't with a margin young.

32:57

When Over went up may say some as I go, it's

32:59

excess I'm like that's the actual costs flick

33:02

eating a free ride across San Francisco

33:04

four dollars really was. The your I it was another

33:06

are right yards from how the elsewhere.

33:08

That you need to hit some level of escape lossy

33:10

before the economics make sense absolutely

33:12

that paradise one I thought it would be ridiculously

33:15

expensive.

33:16

"Let me just go to be some of your company's I'm

33:18

we're going to talk about Open Store last, which is your current

33:20

thing you're focusing on", So Ramp explained very

33:22

briefly and what the reason is.

33:24

Then. Rap is a way of building

33:26

software into this yep, oh, sweet sinister, that

33:28

all the data all the intelligence of want

33:30

to copy spend money on can be stitched

33:32

together save. The company money

33:35

and give the see fo actionable insights

33:37

isn't too busy can think of like hour

33:39

workday for hr. For all

33:41

the CFL Fox and suddenly even more can I buy a soda

33:44

come with that to, oh, my God, that

33:46

yeah, that was like my CFL vote against my, so now

33:48

it's original yada yada. However,

33:50

gym for the said the guy to started down.

33:52

Otherwise very to some have okay got dizzy and like

33:55

how we failure.

33:55

Got the, I remember him pitching it's me a get

33:58

it because they had the as it was. Then. We

34:00

have ten million dollars and I don't know what did as was

34:02

part of the from all over and he's

34:04

like, "What do you think I'm like for the people guess

34:06

for the be bus with Co with?"

34:08

It was really interesting, it's a small businesses

34:10

you typically renting.

34:12

It allows him to buy

34:14

ownership, interest in the real states are renting. So

34:16

people would stay longer.

34:17

" is an attendance it the update

34:19

they actually own the real say.

34:22

So instead of just wasting money I rent for, like, imagine

34:24

you're running a restaurant you can actually owned

34:27

the real estate to. Okay, open

34:29

store.

34:29

The Open Stores, a company that I'm

34:31

actually currently serving C out. What?

34:34

We do is we provide instill acquitted

34:36

each along, tell shop or five arches to shop, have

34:38

I been the greatest technology story of the last

34:40

after it has, despite people saying? Amazon's

34:42

monopoly: was as power south of

34:44

I'd not a direct competitor under the radar,

34:46

don't have one hundred, two hundred billion dollar company. At

34:49

one point, four million businesses, ah?

34:51

Sell their goods and services through

34:54

Shop Hi stores. Right, the smaller

34:56

side of that equation doesn't really

34:58

have access to venture capital that can be source

35:01

of a store and decide you don't want to run it

35:03

for the rest, your life and what your options. The

35:05

we provide in Sindh liquidity like would you

35:07

had open door?

35:08

Sort of like instant underwriting at Square where

35:11

a small business that showing us and ten million

35:13

dollars year and say, "You know what I

35:15

don't want to run this business anymore" And will

35:17

give them in offer in one day. Then

35:19

take over the business and run it, and then where is this

35:21

is all together into one called centralized department

35:24

store?

35:24

Okay, so decentralized apartments or that's

35:26

an interesting ideas, it seems like an inventory

35:28

heavy model like opened on armed.

35:30

Then. Army depends which some businesses carry him

35:32

a toy, some don't, but yes, we absolutely

35:35

need to forecast demands that we have the proper

35:37

in choice we don't have, like strikeouts. You to try to

35:39

buy clothes and issue from us, we that

35:41

shoe, and so we just we have inventory.

35:43

The injury, so we have had you think about it

35:45

was competing with A.M.

35:47

Hetty what the goods and scuse

35:49

we buy?

35:50

Aren't available on Amazon, more than eighty five percent

35:52

of the products that we buy are not available

35:54

for sale on eBay.

35:55

The on the so you can be approached, the opens

35:57

your investment site, you typically you found

35:59

it.

36:00

Anthony, it did you weren't the CEO

36:02

here, you are the CEO right yes

36:04

and you're also executive chairman so so,

36:07

but now you have all the responsibility, so why are

36:09

you doing that?

36:10

I felt that this opportunity was fairly unique

36:12

in a couple dimensions, want to combine my experiences

36:15

of open door and swear it had my for

36:17

merchants and small businesses, which are my

36:19

favorite thing to work ways I've been what's his

36:21

people days.

36:22

Working with small business tools enable people

36:24

to doubled as be Mike Reiss printers

36:26

be successful. Second, the I

36:28

wanted to show that you could, those says, for company Miami

36:31

have I'm moving entrepreneurs Miami if I'm probably

36:33

has a for Miami's I should eat the proverbial

36:35

dog food, though the company seen his show

36:37

that last year yes and vanilla. Then you

36:39

don't want that you wanted found a company. What?

36:42

Are your equity very difficult to scale this I didn't

36:44

see or is incredibly time consuming some most my

36:46

time consuming everybody's problems, the

36:48

companies are ultimately mine swear their

36:50

personal crisis? That professor crisis, their

36:52

family crisis is step health crises,

36:55

and you inherit all that in that definitely

36:57

drains you to some extent that's energizing

36:59

to this year because you can tell. The team you

37:02

can work as a team gets into struck the team

37:04

that spurred given the being D.C. c That

37:06

said my primary job is to drive

37:08

that show returns from I'll PM you have your

37:10

own money in the so Fernando this is a.

37:13

founder spider sense is the largest

37:15

invite her face in the company Right,

37:17

it does consume more time that I adore

37:20

more keys, investment would probably

37:22

three to four acts.

37:23

Alright, I can't let you know two things one is

37:25

politics here you are in Florida, you're not far from Donald

37:27

Trump, how do you look at politics you don't

37:29

bash the by demonstration right now I'd love to know where

37:31

you'd think it's going?

37:32

One big fan of the governor here of.

37:35

excited for his side a big fan of trump right

37:37

now or whatever they seem to have ride or the eyes are

37:39

those as you get all your but okay fine

37:41

whatever What do you see have?

37:43

In the Republican Party, I would expect

37:45

that Trump will not be the Republican nominee a

37:47

cause. They prefer just age

37:49

that the truthfully.

37:50

The other parent my parents are roughly

37:53

series Biden and I definitely would not

37:55

recommend them running for President and Socom'so

37:57

so Trump. Those same thing as

37:59

I keep. His prime: think he's burned a lot

38:01

of bridges. I think

38:03

there's a big for example governor here

38:05

Rod Santas is forty three years old and

38:07

I think it's better for society that.

38:10

we encourage people still apply him If

38:13

you run for office. Except for example,

38:16

met a current senator yesterday for breakfast

38:18

and. You know, youngest

38:20

twenty percentile the senator's age

38:22

is like buyers and isn't the youngest

38:25

my present, I'm like, oh, my God doesn't decide age,

38:27

so dissenters I think has a

38:29

great track record of success in Florida he

38:31

gets similar policies is from. weed

38:34

out the personal crazy this and unpredictability,

38:36

I think what Americans want. Trump,

38:39

basic Lee. It. Was like rolling

38:41

the dice every day and you never knew what you're

38:43

gonna get, his allies never knew where they're going to get his

38:45

numbers of Congress where Republican on the. Hood, ever do

38:47

what crisis they were going to wake up to that was self induced

38:50

test, his level of unforced errors was.

38:53

incredibly high.

38:54

Do I think if you took the same are close to

38:56

similar policies, a trump who were more

38:58

disciplined personally and professionally,

39:01

I think that's a package that the American people would support?

39:04

What about among the Democrats if you are helping

39:06

them?

39:06

I. Needed to the get a governor, someone not

39:09

associated with the current administration is

39:11

it situation is gonna run for reelection was

39:13

numbers of it's like Jimmy Carter's and with

39:15

our. Average recorder, so I think

39:18

governors in Colorado been progressive on

39:20

some issues and thoughtful about and lisburn

39:22

yeah, or Alice, how is this interview

39:24

or Roy Cooper, North Carolina at

39:26

A? Good, the present a much more difficult

39:28

challenge for the that was I'll betcha and in

39:31

yeah, I think she'll have issues on the last

39:33

in a little challenging snot

39:35

that well. Lights on the last, but

39:38

ah, my six certainly would do better than

39:40

Biden.

39:41

Interesting, interesting or eight at

39:43

their life, as I'm gonna make you say one thing nice about California

39:46

what he him. One thing. Like

39:48

I get. Hi peter, take sir.

39:51

Still there too.

39:53

Prepared for the I it, it out and know, and

39:55

as a you cannot easily as it's surface feel

39:57

to it is not national me and now in droves

39:59

it'll have.

40:00

I like the you have to go, you have to go fairly far

40:02

away to monitor.

40:02

Yeah, that's true will keep patronage as

40:04

big sur is waiting for you still are

40:07

also thankyou key for boy of as a great discussion.

40:09

But your to be or.

40:20

Are you the production

40:22

of New York Times opinion is produced

40:24

by name or rather up Blakeney shack

40:26

Daphne Chen Caitlin O'Keeffe and why?

40:28

In. The original

40:31

music by Isaac Jones mixing

40:33

by Sonia Herrera and Carol Sub a Row

40:36

and fact checking by Kate Sinclair and Mary

40:38

Martin Luther Special, thanks

40:40

to Shannon Buster Christian Lynn and Christina

40:42

Samuel Escape. the senior

40:44

editor of sway same sway rather and

40:47

executive producer of new york times opinion

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audio is irene the duty

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