Picto Diary - 05 November 2019 - Founders Fund (Part One)
Above: Cable Car. Powell and Sutter. San Francisco, CA. 05 November 2019.
I never left my heart here, but I don't mind returning occasionally. Business meetings today. — at San Francisco Marriott Union Square.
Above: Peter Thiel. Founders Fund. The Battery Club. San Francisco, CA 05 November 2019.
FOUNDERS FUND LIMITED PARTNERS ANNUAL MEETING 05 November 2019
Peter Thiel, Partner, Founders Fund
Founders Fund is a Los Angeles based venture capital firm. Formed in 2005, Founders Fund had more than $3 billion in aggregate capital under management as of 2016. The firm invests across all stages and sectors, including aerospace, artificial intelligence, advanced computing, energy, health, and consumer Internet, with a portfolio that includes Airbnb, Lyft, Spotify, Stripe, and Oscar Health. Founders Fund was the first institutional investor in Space Exploration Technologies (SpaceX) and Palantir Technologies, and one of the earliest investors in Facebook. The firm’s partners, including Peter Thiel, Ken Howery and Brian Singerman, have been founders, early employees and investors at companies including PayPal, Google, Palantir Technologies, and SpaceX.
Bishop's takeaways from Peter's remarks:
Six funds, 2005 to 2017, payback to date:
1. 581%
2. 244%
3. 43%
4. 123%
5. 37%
6. 0%
Long gestation. Patience required. World transformative companies sometimes take time to reach scale.
Contrarian Founders avoided consensus disasters eg. Theranos
2010's Philosophy: Invest in potentially great companies nobody likes and that are cheap.
2010. Founders' best wins were non consensus.
Mid decade, shift to consensus work. SpaceX, Palantir, Bitcoin, and Stem Centrix.
2010's dominated by Web 2.0 and internet successes.
Search for fashion.
Crazy returns. When it worked it worked, it worked really well eg. Facebook.
Eventually crowds turn to madness. Tipping point happened later than people thought possible.
2020's
Buzz words...machine learning, AI,. There is a lazy nihlism about the future.
People still looking at the old models. But,
Top boomer VC's' seem to believe in something.
Rise of China
Networking is working
University led research
Size is strength.
Wisdom of crowds worked for Boomers
Generational hand off is happening.
Wisdom of crowds will tip to madness of crowds.
Maoist markets
Network not working
Academia stalls
Size less key
10 yr Treasury yields decline.
Great product, great business, great unit economics, great founder still paramount.
In a world of negative yields temporary negative yields look.attractive.
2015: Founder mania trumped tech and margins, until the mob devoured them (founders), 2019.
2020. Back to future. Contrarian is good. Stick to knitting.
Q and A
Bishop: On the one hand, surfeit of arts graduates carrying huge student loan burden with no job prospects. On the other hand, shortage of petroleum engineers where entry level salaries exceed $200K per annum. What gives? Isn't the marketplace supposed to sort this out?
PT: Loaded question. Gets into political, culture and climate change discussion where I'm not going to go. Let's just say that college graduate petroleum engineer has attracted highest entry level salaries, in excess of $200K, for the last 20 years. That (highest graduate salaries) is not going to change in the next 20 years.
Personal note:
I love attending this meeting. Site of a true meritocracy. Centa millionaires in shorts and flip flops presenting world changing business success. Billionaires accessible for chit chat. Heavy mix of Stanford Silicon Valley types...Asian Americans, Indian Americans, European Americans (more than a smattering of whom are Jewish), all with off chart IQ's most in their 30's very very creative and very very rich. No women amongst the business founder presenters...the creative types. A fair few of women amongst the investor reps and conference staff. Look, just sayin'!
Peter's contrarian vision permeates the conference atmosphere. Sometimes I have to pinch myself, an old geezer at ground zero of the American tech/business nexus, in the presence of the most creative people on earth.
I got my 2 or 3 personal minutes with Peter at cocktails. Smile on his face he was sheepishly guilty acting about not yet coming to speak to LSDM. He renewed his commitment to come. If it happens it happens. I won't be disappointed if he doesn't come. For me it's enough to experience this phenomenon of world changing business success and to personally benefit from it.
Above: Brian Shimph and Palmer Luckey. Anduril. Founders Fund. The Battery. San Francisco, CA 05 November 2019.
FOUNDERS FUND LIMITED PARTNERS ANNUAL MEETING. 05 November 2019
Brian Shimph. Cofounder and CEO.
Palmer Luckey, Cofounder and CFO.
ANDURIL
We started Anduril to disrupt an antiquated approach to defense; and in doing so, save lives, save taxpayer money, and make the military-industrial complex way less complex.
Move Fast and Fix Things
Anduril brings a modern product development approach to the defense sector. Our methodology is based in our leadership experience delivering cutting-edge consumer hardware and national security software, leveraging the latest off-the-shelf components with custom .
Real World Development
Anduril works closely with end users on the front lines of life-and-death operations. This direct collaboration means we can provide rapid solutions to real problems operators discover in the field, cutting through the typical red tape that holds back innovation. And because Anduril self-funds development, we can launch new products faster than a traditional government-dependent contract can even be approved.
Tools for Tomorrow
We’ve built a world-class R&D facility for next-gen defense, featuring the latest technology for both prototyping and deployment under one roof. This allows hardware and software engineers to experiment and validate in weeks, not years; vastly reducing the time needed to incubate, improve, and iterate new products.
AI Defense
Anduril applies artificial intelligence in real world field conditions. That means our Sentry Towers and Ghost UAS are currently deployed in diverse locations actively disrupting criminal cartels and protecting military bases.
Anduril is not a research lab, but a technology product company. We never stop brainstorming – and then producing creative and practical solutions to the most challenging national security problems.
Takeaways:
Build it well, government will buy.
2019. $48 MM contract value.
We are defense company, not a tech company.
Punitive defense doesn't work any more
Must find ways of neutralizing tech of enem
Above: Xuan Young. Founder and CEO of Rigup. The Battery Club. San Francisco, CA.
FOUNDERS FUND LIMITED PARTNERS ANNUAL MEETING. 05 November 2019
RIGUP
Empowering the people who power the world™
We’re building the energy industry’s largest marketplace, connecting independent contractors with work and matching service providers and operators with the workforce that will get the job done.
Leaders in the field.
What began as a workforce bidding platform quickly grew into the largest marketplace and provider of labor in the energy industry. Our growing team is diverse and talented, and we’re focused on leading the energy industry into the future with innovative technology.
Bishop's key takeaways:
The economy is screwed. US drastically short skilled labor in energy sector.
50% of skilled energy work force retires in next five years.
We are losing the people who power the world.
Solve problem by intensive workforce training. Rigup can help here.
— at The Battery.
Addendum
Steve loves riding his bike, but it makes me nervous. You are putting your readers on your bike. Very vivid.
Hoops,
Pelham, NY
Glad you had the opportunity to ride before the snow.
Mr. Z3,
Oxnard, CA
Congratulations to Jake.
Hoops,
Pelham, NY
Very proud of Rudy Jr.
Steve,
You father was right, of course, and, unlike what comes from the Left - people who work hard to shut down the expression of opposing ideas - no conservative, certainly not me, is suggesting there should be no controversy, or that anyone's views should be suppressed. The fact is, it just isn't that hard to understand the liberal psyche and the arguments that flow from it.
The question I think you need to address is one of cost benefit - opportunity cost. What you might better do with your time than spending many hours reading liberal crapola. Not for a minute am I arguing that there is no virtue in correctly understanding the other guy's argument just as he chooses to make it, but, in my view, one hardly needs to spend the time needed to read a whole book in order to get a working knowledge of the liberal mind and argument on virtually any important subject. Common knowledge, really, and I think your summation of the book you read makes that point. These people are so pathetic, so intellectually, morally and spiritual bankrupt, their corruption virtually screams out at you every time they open their mouths or go into print. Have you learned anything from such reading that you didn't already have a good grasp of? Have you, consequent to such reading, experienced an epiphany of insight into the liberal world view? Anything that would tend to persuade you that you were fundamentally wrong in some previous take?
I am always open to an alternative way of looking at things, but not when the condition is that I spend a great deal of precious time and agree to submit myself to intellectual, moral and spiritual insult.
Street fight, not a garden party, Steve, and everything is at stake. You don't need to read a book and lean back in your chair, self-satisfied, styling yourself as an open-minded fellow. We don't live in a Grey Age. Black and white, right and wrong, good and evil, truth and lies are the order of the day. You need to get hold of your principles and crack some heads - figuratively speaking, of course.
Torquemada
p.s. So many books, so little time!
Nah...books like Stewart's challenge the intellect. He's a good writer notwithstanding his bias. Think I'll continue to read from all sides.