Silicon Valley is losing another tech heavyweight: Keith Rabois, prolific startup investor, early exec at powerhouses such as Square, LinkedIn, Yelp, and PayPal, and longtime Bay Area resident. He tells me he is “moving imminently.”
Rabois revealed his decision to decamp during our conversation at the Meridian conference, an event hosted by the cryptocurrency-focused group Stellar Development Foundation. (Rabois, an investor in Stripe, joined Stellar’s board after Stripe made an investment in Stellar six years ago.)
“I think San Francisco is just so massively improperly run and managed that it’s impossible to stay here,” Rabois said. He believes he is not alone in giving up on the Bay Area, a place he has called home for two decades. He cited anecdotal evidence about many people in his social circles leaving, and noted, “COVID sort of masks this stuff. It’s not quite as obvious where people are moving to and if they’ve actually moved since everybody’s working remotely.”
Rabois is one of many Bay Area forsakers. His planned departure follows the flight of Peter Thiel, Rabois’s old Stanford buddy and PayPal partner, to Los Angeles in 2018. (Rabois joined Thiel’s venture capital firm Founder’s Fund last year.) In a much-read IPO prospectus this year, Alex Karp, CEO of Palantir, a PayPal spinout and Rabois investment, also said he was relocating the company to Colorado after laying into the Valley’s tech firms, calling them unpatriotic for pooh-poohing military contracts. And Jack Dorsey, CEO of Twitter and Square, where Rabois worked as chief operating officer for three years, planned to move to Africa before the pandemic struck.
Add Rabois to the list of emigrants. He said that COVID helped expose that the perceived handicaps to moving out of California are “more psychological than real.”
Data from Opendoor (which Rabois cofounded) and rival firms like Zillow reveal a trend. “Bay Area searches for rent are in free-fall, they’re down like 30%,” Rabois said. In big cities like New York and Los Angeles, rental searches are also dropping like crazy, as people acknowledge “all of the downsides” of urban life—higher costs of living and closer quarters—with few of the mostly social upsides, he said.
“It’s very clear right now, people are shifting their preferences pretty massively,” Rabois said. He added, though, that it remains to be seen whether the trend will continue once a vaccine becomes widely distributed and cities are able to open back up.
So where is Rabois moving? Just in time to avoid a west coast winter, he’s buying a home in the sunshine state. “Miami is an incredibly beautiful city, cosmopolitan, has an interesting mix of New Yorkers, Latin Americans, and Europeans,” Rabois said of his soon-to-be-home. Oh, and, “There’s no state income tax.”
“Living in the Bay Area for 20 years, it’s just like, all the things you wish you had,” Rabois said. “I’m a fan of warmer weather and water, so it feels like I’m going on vacation.”
How many will follow?
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P.S. I don’t want to say I told you so just yet, but this early report of the new MacOS bricking computers, as Aaron pointed out yesterday, seems to confirm my theory that the rollout of Apple’s new tech would not go as planned.
Robert Hackett
THREATS
We hope you enjoy your stay. Airbnb revealed its initial public offering paperwork on Monday, resuming plans it put on hold when the pandemic wrecked its business earlier this year. The company is far from consistently profitable, though it did bring in $219 million of profit on $1.34 billion in revenue in the third quarter of this year. Data Sheet's Danielle Abril dives into the numbers here.
Check yourself before you wreck yourself. Fact-checking labels are having little effect on curbing people's enthusiasm for fallacious Facebook posts by President Donald Trump. The labels, called "informs" within Facebook, decrease shares by about 8%, a minor impact given the leader's massive reach to millions of followers, BuzzFeed reports. And so unfounded allegations of election fraud continue to run rampant.
Do you know where your data is? The U.S. military—yes, the same one known to order drone strikes—is buying people's geolocation data. The data is siphoned by third-party aggregators from regular-seeming apps, usually unnoticed by their users. One of the apps cited in this Vice investigation is a Muslim prayer app with more than 98 million downloads.
Make way for Mudge. Twitter has hired a new head of security: "Mudge," a well-known hacker whose birth name is Peiter Zatko, Reuters reports. Mudge previously headed security at online payments firm Stripe, did a stint at Google, and helped the Pentagon hand out cybersecurity project grants. After this summer's big Twitter hack—in which Bitcoin scammers stole internal tooling to hijack celebrity accounts—there's no doubt Mudge has his work cut out for him.
ACCESS GRANTED
Central to 5G technology is an obscure information theoretic breakthrough called "polar codes," devised by the little-known Turkish scientist Erdal Arikan. The Chinese telecom giant Huawei seized the work, patented key aspects, and fought—successfully—to have it committed into the global standard for 5G. In this illuminating Wired profile, Arikan plays down the significance of his innovation, but says Huawei's parade of triumphs indicate that China will dominate the tech industry for decades to come.
“Polar codes itself is not what's important,” he continued. “It is a symbol. 5G is totally different than the internet. It's like a global nervous system. Huawei is the leading company in 5G. They will be around in 10, 20, 50 years—you cannot say that about the US tech companies. In the internet era, the US produced a few trillion-dollar companies. Because of 5G, China will have 10 or more trillion-dollar companies. Huawei and China now have the lead.”
FORTUNE RECON
Tesla will be added to the S&P 500, officially becoming a blue-chip stock by Jen Wieczner
Your employees are not okay: How to handle mental health at work during a pandemic by Erika Fry
COVID-19 reminds us of the need to focus on health equity by Kyu Rhee, Irene Dankwa-Mullan, and Eduardo Sanchez
(Some of these stories require a subscription to access.Thank you for supporting our journalism.)
ONE MORE THING
The first volume of Barack Obama's autobiography, A Promised Land, drops today. The former President gave a wide-ranging interview to The Atlantic in which he discusses the impact of social media on democratic discourse. Here's a taste: "The degree to which these companies are insisting that they are more like a phone company than they are like The Atlantic, I do not think is tenable. They are making editorial choices, whether they’ve buried them in algorithms or not."
That sound you hear is Section 230 of the Communications Decency Act getting shredded into confetti.