Recode Decode: Keith Rabois

  • Quick bio: PayPal πŸ‘‰ LinkedIn πŸ‘‰ Slide πŸ‘‰ Square πŸ‘‰ Khosla Ventures πŸ‘‰ OpenDoor

  • What does OpenDoor do? We allow you to sell your house in 30 seconds online. You put in your address and we give you an offer. You get instant liquidity. Instead of waiting 84 days [on average] and have strangers come through your house everyday.

  • How did you meet Peter Thiel: I met Peter Thiel at Stanford when he was delivering his alternative newspaper to my dorm room. Later on he recruited me to PayPal. It was a bunch of misfits burning about $10 million a month.

  • Definition of technically founded investments: It means the core risk is the technology. Can this actually happen? Can it be done? For example can you build an autonomous vehicle? The market is there. If someone could deliver this people would buy it.

  • A potential benefit of autonomous vehicles: I’ve read studies that between 20% to 40% of real estate is allocated to parking. That’s crazy. Think about how much housing you could build or other uses for that space if you didn’t need parking.

  • I’m a people-based investor. I invest primarily in founders: I’m assessing the opportunity that the people in front of me have of changing the world. It is completely ridiculous to say I’m going to change an industry that has been around for centuries. But it happens all the time.

  • I believe scarcity of capital is a good thing: That desperation breeds innovation. You need constraints to execute well and innovate. If someone gives you a pile of money it leads to soft thinking. The disciplined companies that get product market fit without a lot of capital are almost surely going to do better than the companies that chase hundreds of millions of dollars.

  • We invested in Rocket Lab: They are producing low cost rockets that can put satellites into orbit quickly and regularly. The goal is to put rockets into space as frequently as planes take off. 

  • Regarding some criticism lobbed at Facebook: I would posit that anything you’ve seen on Facebook regarding targeted ads can be done using more personally sensitive data using direct mail. Direct mail has been around for decades and you don’t see The NY Times writing exposes on it.

  • What would you criticize Facebook for? Their communication strategy has been intellectually bankrupt. They should be framing these debates instead of waiting and reacting to them.

  • The alternative to raising money from unacceptable sources [Saudi Arabia, Russia, etc.] is going public: Going public means taking money from everyday Americans. Going public means you have serious scrutiny. That is a good thing. It is a good thing for your company to be subject to auditors and transparent reporting. I think people are trying to insulate themselves from accountability.

  • Book recommendations: The Breakthrough: Immunotherapy and The Race to Cure CancerWho Is Michael Ovitz, and Churchill: Walking With Destiny.

  • Full podcast here.