E1152: Keith Rabois on leaving Silicon Valley for Miami, Roaring Twenties 2.0, IPO spree & more

Episode Summary

Executive Summary: Jason Calacanis and Keith Rabois discuss the pandemic’s trajectory, arguing vaccines and prior infections should bring substantial normalization by mid-2021. They connect COVID to durable shifts in work, investing, migration, public markets, and city politics, making the case that remote/hybrid models, geographic decentralization, and faster paths to public markets are here to stay.

Main Topics: Pandemic outlook and vaccine timeline: They assess late-2020 COVID trends, vaccine efficacy, and how quickly life might normalize. Both are cautiously optimistic, though they disagree slightly on whether material recovery begins in Q2 or later in summer 2021. Lasting changes in work and collaboration: Rabois argues that company size and function should determine whether teams return to offices, favor hybrid or remote models, or use distributed hubs. He strongly favors in-person interaction for early-stage innovation and debate. Migration away from the Bay Area: The conversation focuses on founders and investors leaving Silicon Valley for Miami, Austin, Seattle, Atlanta, Berlin, and other hubs. Rabois says the pandemic exposed quality-of-life, tax, and cultural weaknesses in San Francisco. Public markets, SPACs, and IPO acceleration: They debate why companies should go public earlier and why SPACs fit breakthrough companies that want to forecast future revenue more flexibly than in a traditional IPO. Rabois defends SPACs as a better fit for some tech businesses. Retail, delivery, and mobility sector shifts: They argue the pandemic accelerates certain businesses like DoorDash and home-based digital services while potentially weakening Uber/Lyft’s long-term position due to suburbanization and more private car ownership. Political and fiscal consequences for California and cities: Rabois predicts the Bay Area and California may need a crisis before reform, citing public safety, taxation, and governance problems. He contrasts California with more business-friendly states and cities like Florida and Texas. Meaning, losses, and the venture investor mindset: The discussion turns introspective: how investors derive satisfaction from backing underestimated founders, how to handle failures, and why venture success is judged over long cycles, often seven-plus years later.

Key Arguments: COVID is likely a quarters-not-years problem because vaccine rollout plus prior infections should materially improve conditions by mid-2021. The stock market is rationally pricing in both reopening and a structural shift from analog/physical processes to digital ones. Work will not return to a one-size-fits-all model; large companies, startups, and creative teams will likely adopt different mixes of office, hybrid, and remote work. Early-stage innovation benefits from co-location because spontaneous, high-bandwidth debate is harder on Zoom. A distributed hubs model can outperform pure remote or single-office models by clustering talent by craft and geography. The pandemic accelerated a pre-existing migration out of the Bay Area driven by culture, politics, cost, and quality of life. Miami, Austin, Seattle, Atlanta, Berlin, and other cities are becoming credible centers for startups and investing. SPACs are useful not just for speed, but because they let companies publicly discuss forward revenue potential more like a private fundraising. Going public earlier is healthier for tech companies than the long-delayed IPO model that became popular in Silicon Valley. Companies tied to dense urban behavior may rebound, but some consumer shifts, such as more suburban living and less business travel, may be permanent. DoorDash is positioned better than Uber/Lyft in a more suburban world because it already works in less dense markets. California’s political and fiscal model is vulnerable because wealthy taxpayers can leave, shrinking the tax base while costs keep rising. Investing is most psychologically rewarding when backing companies nobody else believed in, rather than riding consensus winners.

Data Points: New COVID cases identified daily: 200,000 - Used to describe the late-2020 U.S. pandemic peak. Daily deaths: 3,000 per day - Referenced as deaths rising again during the winter wave. Share of travel at Thanksgiving: 80% the same as prior levels - Mentioned as evidence people were traveling despite the surge. Estimated U.S. population with prior COVID infection: About 100 million - Based on diagnosed cases multiplied by undercount assumptions. Confirmed U.S. cases mentioned: 15 million - Used as the base figure for estimating undercounted infections. Vaccine efficacy: 95%-96% - Cited for the first two vaccines available at the time. Vaccination pace expectation: 40-60 million shots per month - Referenced as the rollout pace for December through February. Estimated time to broad normalization: Q2 to summer 2021 - Calacanis argued Q2, while Rabois leaned toward mid-2021 / summer material improvement. DoorDash valuation at IPO: About $37 billion - Calacanis states this as the expected public valuation. Opendoor SPAC valuation example: About $13-14 billion public-market value - Used to illustrate the market’s response to the SPAC transaction. Opendoor SPAC deal valuation: $5 billion - Referenced as the original Chamath-led transaction price point. Number of California companies/winners leaving Bay Area in Founders Fund portfolio: More than half - Rabois says over the last 3-5 years, the most important portfolio companies were outside SF/Bay Area. Atlanta investment size: $31 million - A major round led into Stewart, founded by Thiel Fellows. Private company addressable salary example outside Bay Area: $40,000-$50,000 - Rabois contrasts Florida labor costs with the Bay Area. Bay Area entry-level salary example: $60,000-$70,000 - Used to show higher operating costs in San Francisco. Non-compete enforcement reference: 50 miles - Example of a hairdresser having to work more than 50 miles away. Slack acquisition value: $27 billion - Referenced as a sale that might have been a missed opportunity for independence. Value of early Twitter/Knicks-relevant discussion: Not quantified - Used more as commentary; no distinct numeric metric beyond team-building context.

Pivotal Quotes: "there is reason to believe that by the second half of 2021, we'll be able to live much more normally." — Keith Rabois: On vaccine rollout and the medium-term COVID recovery outlook. "I think there is a shift to private ownership of cars because people have concerns about sharing space with drivers and other passengers." — Keith Rabois: Explaining why Uber and Lyft may not fully return to pre-pandemic strength. "you don't want to be the best at what you do, you want to be the only one who does what you do." — Keith Rabois: Calacanis cites Pat Riley as a guiding maxim for founders and investors.

Implications: Expect more hybrid work, more startup activity outside Silicon Valley, and more companies using SPACs or earlier public listings. Cities and states will increasingly compete on tax, safety, and quality of life to retain talent.