Unicorn investor Keith Rabois says tech talent is fleeing Silicon Valley

Business

By CAPosts 30 November, 2020 - 11:15am 193 views

Keith Rabois has wanted to leave San Francisco for a long time. It pays excruciatingly high taxes, the public education system is decadent, crime is rampant and the terrible commuting proves it, he told Business Insider.

And, of course, he hates the liberal politics of the Bay Area, which he described as a "monoculture in world perspective." Rabois is known in Silicon Valley as someone who lines up in companies with his team of liberal investors like Peter Thiel, Joe Lonsdale, and David Sacks; Although he describes himself as a conservative

But for years, Rabois endured the Bay Area. He built his career in Silicon Valley, was one of the first executives at PayPal, LinkedIn and Square before becoming a full-time Venture Capital at Khosla Ventures, where he made investments in unicorns like Affirm, DoorDash, and OpenDoor (the home buying startup that helped co-found in 2014).

© Pexels Keith Rabois, Silicon Valley Investor

The outspoken investor is now a general partner at Founders Fund, where he works with his first PayPal mentor, Thiel.

"If you had asked me before March 2020 if I enjoyed living in San Francisco, I would have said no, but professionally I needed to be here," Rabois told Business Insider.

"And because I have very strong career goals and ambitions, I felt like I had to compromise my personal preferences to be a successful professional," he said.

Remote work brings talent out of Silicon Valley, says Rabois

Rabois was referring to the tremendous concentration of founding and engineering talent in the Bay Area; which has made Silicon Valley the undisputed center of the technological universe for decades. Earlier, he said it was "psychologically difficult" for him to envision a great startup anywhere else.

However, the pandemic changed Rabois's calculation as more tech companies embraced remote working. So the founders and CEOs moved across the country.

The Eureka moment, Rabois said, came after a few weeks in quarantine. Then he realized that the pandemic was already bringing a "massive and lasting transformation of how people worked and lived."

"The idea that there is this powerful network effect in the Bay Area was already eroding," explained.

And that meant that the tech world was beginning to see that someone could "build companies in a distributed way or in different locations" and that an investor like him could be successful "in a variety of different places." move from Silicon Valley, says

investor While the idea of building a technology company outside of Silicon Valley is not new to billionaires like Bill Gates or Michael Dell; In 2020, a growing number of big-name CEOs left. Those who have just left include Dropbox's Drew Houston and Splunk's Douglas Merritt, who have moved to Austin, where they plan to make the Texas capital their permanent homes.

Brex co-founders Henrique Dubugras and Pedro Franceschi are moving to Los Angeles, abandoning the ongoing lease of their company in San Francisco, The Information said earlier this week .

Then there are people like Thiel and the founder of SpaceX, Elon Musk, who reside in Los Angeles. Thiel and Lonsdale's company, Palantir, moved to Denver, and Lonsdale himself moved to Austin.

Rabois, however, says this list is only the surface of a much larger exodus of tech talent from the Bay Area. from San Francisco.

"Many of the most ambitious people on the planet have lived here," Rabois said of his former hometown. “But after Covid, I think the concentration of talent has atrophied, perhaps permanently.”

Rabois is known for his outspoken investor

As known as he is for his successful investments, Rabois's reputation is also based on his outspokenness . For example, Rabois advocated for the use of the antimalarial drug hydroxychloroquine to treat coronavirus; despite public health officials pointing out that the drug is ineffective against Covid-19 and has caused serious complications among patients . (There is no conclusive evidence yet that the drug works against Covid-19.) And two days before the 2020 election, boldly predicted that Trump would receive 46% of the popular vote, but with substantial support from Hispanics, Blacks, gays and Jewish voters.

That self-image as "contrary" is also key to your success as an investor, says Rabois. One example he cited was the Founders Fund's decision to back drone startup Anduril Industries, which is working with the U.S. government and Customs and Border Protection (CBP) to build a virtual border wall and has just landed a lucrative contract with the United States Air Force.

Anduril has generated controversy since its inception, in part because of its founder Palmer Luckey, who sold his first company, Oculus, to Facebook for $ 2 billion. Luckey supported Donald Trump during the 2016 and 2020 elections and the company's first contract in 2017 was with CBP when the agency was pursuing tough new anti-immigrant policies. Anduril is now valued at $ 1.9 billion.

"Most people in San Francisco don't believe in supporting the US Department of Defense," Rabois said. “When a company like Anduril was founded, very few people would have financed it. We found it to be a comparative competitive advantage. ”

Rabois will move to Miami to improve his investment plans

So, Rabois says he will move to Miami in December not only because it is a city with no income tax and sunny beaches. Also, he hopes the city will help him become a better opponent, away from the Silicon Valley culture that allows him to "identify blind spots where we can invest and outperform."

"The truth is, when you pass a lot of time on Twitter and in Silicon Valley; Even when you're trying to think differently, it's challenging because all the oxygen around you is from a general arc, ”Rabois said.

"Breathing fresh air could help me find new opportunities, because my brain will not be so corrupted," he added.

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Source: MSN