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Good morning,
This week’s Stratechery Interview is with F1 driver-turned-venture capitalist Nico Rosberg. Rosberg started his F1 career in 2005, and retired after winning the world championship in 2016; Rosberg spent his last four years as teammates on Mercedes with his childhood friend Lewis Hamilton in one of the most intenst teammate rivalries in F1 history.
Over the last several years, however, Rosberg has reinvented himself as a venture capitalist, founding Rosberg Ventures, with a specific focus on leveraging his F1 background to build connections between European money and Silicon Valley startups in one direction, and startup products and German businesses in the other.
In this interview we cover all aspects of Rosberg’s journey, from having a steering wheel in his crib, pioneering the use of sports psychology in F1, and his decision to retire on top of the world. Then, we discuss how F1 builds connections, the similarities between founders and drivers, and how he realized he could leverage that in a new competition: winning as an investor. What I found particularly interesting is how Rosberg’s background and history seems so varied and unconnected on the surface, yet are clearly linked by a consistent ethos of maximizing opportunity in the service of winning.
As a reminder, all Stratechery content, including interviews, is available as a podcast; click the link at the top of this email to add Stratechery to your podcast player.
On to the Interview:
An Interview with F1 Driver and Venture Capitalist Nico Rosberg About the Drive to Win
This interview is lightly edited for clarity.
Topics:
A Driving Background | The Mental Game | Promotion | Winning the World Championship | The Path to VC | Maximizing Opportunities | Paddock TalkA Driving Background
Nico Rosberg, welcome to Stratechery.
Nico Rosberg: Thank you very much, Ben, it’s really an honor to be on the show. I hear so much about your show always especially when I’m in the Bay Area.
Well, I don’t normally interview venture capitalists on Stratechery, but you are no normal venture capitalist, which you use to your advantage. I want to ask you about that, but needless to say, that made this an easy exception to make, particularly since I’m a big Formula 1 fan. To that end, I always start my interviews talking about the subject background, we may spend a bit more time on yours if that’s okay with you, it’s pretty fascinating.
NR: I understand. With pleasure.
Okay, good. Well, you were born in 1985 in West Germany to a German mother and a Finnish father. Your father Keke was the 1982 Formula 1 world champion. Was there a steering wheel in your crib when you came home from the hospital?
NR: There was actually, yes.
(Laughing) Oh, that’s funny.
NR: On my Facebook page you would see photos of me in a go-kart when I’m like three years old with a helmet on and everything, so yeah, it was an early discovery of that passion.
I’m interested about that because obviously your father was tremendously successful, is he immediately all in on, “You have to do what I did”, or was there ultimately a bit of humoring you, “You can come along and try this but I’m not sure you could ever measure up to what I did?”.
NR: There was a go-kart track near our house and he was going there with his friends even before I was born and then when I was born, and then I was six, seven years old, we just gave it a go, I enjoyed it, and I looked pretty fast also. So then he was like, “Maybe this can become a father-son hobby”, it just went from there and then you start doing a race here, a race there, I started winning the races kind of immediately and so that even that hooks me even even more than when you win, of course, it’s amazing, it’s an amazing motivation. So that’s how we just kind of got going and it became an amazing father-son hobby to share. We spent a lot of time with each other, we traveled in a motorhome to the races, so it was really lovely.
There definitely is a bit to driving a car very fast. On one hand, of course, you started early, and you see the history of Formula 1 drivers, they start early, but you took to it right away. It’s definitely like father, like son in that regard.
NR: Indeed. I think as in every sport — you also see it with golf or tennis — you have to start pretty early now it just gives you a head start and in practicing those skills. And I think, yeah, I guess I inherited some of those genes from my father because we need to be very good at hand-eye coordination, that’s super important.
Yep.
NR: We need to be also very good at processing things very quickly because we have things coming at us at 220 miles an hour, our eyes are flickering left and right all the time, just taking in all the inputs that we’re seeing and also feeling, so I think that also probably has to be a strength of ours.
There’s a lot of stuff in your background about your parents really pushing you in terms of academics, learning lots of languages, all that sort of thing. Was that unique to you, or to your bit, it always strikes me that Formula 1 drivers all come across as very intelligent. And to your point, there’s such a high degree of information processing that’s happening on, is that the norm, generally speaking?
NR: I think you probably need to be a bit street smarter, at least, to be a successful F1 driver than maybe in some other sports, because we depend so much on this high technology car, and if we’re not able to understand the car, set it up properly, be at least street smart about all these things, then it doesn’t matter how talented you are, you’ll never be able to go fast. So probably I would say that in our sport, yeah, that comes a little bit more to the fore than maybe in other sports.
But in my case, actually, my parents pushing me at school was the contrary, my mom and my dad would usually come in late at night and say, “OK, stop now”, because I was always very hard working at school. Somehow we had a group of friends, everybody wanted to achieve, and I wanted to achieve as well, and I had to catch up because I was missing half the week every other week because I was racing. So my parents were more actually telling me to stop now because I was trying to make too much of an effort to catch up.
Interesting, because a bit I want to get to here is you’ve had such a widely varying career, even since you finished racing, you finished relatively young, and so that has been a theme for you all along, is like you born with the steering wheel in your crib, but you’re interested in more than that.
NR: Yeah, I really always enjoyed the academic side. In fact, if I wasn’t going to make it as a driver, I already had a place reserved for me in Imperial College in London to study aeronautics, that was my plan B of how to get into F1, which would have been as an aerodynamicist.
Right, design the car instead of driving it.
NR: I don’t know if I would have gotten there in the end, but I think I had a good shot, so that was my plan B was already set.
The Mental Game
You’re most famous for your rivalry with Lewis Hamilton but as I understand it you actually met him quite young you were teammates in carting as well?
NR: It’s a pretty crazy story because the McLaren Formula One team wanted to set up a little go-kart team at the time, and the two rising star drivers at the time was Lewis Hamilton from Great Britain and myself down south, and so they actually funded our two go-karting seasons. And so it was just the two of us driving for the McLaren Mercedes go-karting team and we were winning all the races and championships. Unfortunately for me, more often than not, it was Lewis winning and I was second, but there we go.
So it’s incredible because we were best friends at the time and we were 13 years old and we were on holiday together all the time and dreaming, “Imagine what it would be like in 15 years to be in the F1 team together, winning races and championships?”, and it was impossible to achieve that dream, just seemed so far away. And yet really 15 years later, we’re in the Mercedes F1 team as teammates fighting for races and championships, so it’s a pretty incredible story.
I mean, why did it seem even that impossible, though? I mean, your dad was an F1 driver, you’ve been racing in karts. What makes F1 feel so far away?
NR: Well, come on, you can imagine if you’re 13 year old and you’re playing in your regional tennis camp in the middle of nowhere that you look at the television and you see [Jannik] Sinner and [Carlos] Alcaraz fighting for the Monaco Masters that’s going to look like extremely impossible and far away.
Right, but there wasn’t a bit of total self-belief that, “I’m going to be there, there’s no question”?
NR: Well maybe Lewis is a little bit more like that, I’m more sensitive, more insecure, less self-belief, so I never actually really believed of myself that I could get there and be good enough, which has pros and cons to think like that, because it also is an incredibly strong motivator. When you don’t have that self-confidence, you just fight so hard to prepare to the best of your abilities all the time. So it has pros and cons, and it was nice to see that, of course, someone like me that did not believe until the very last corner, I was still able to actually win in the end, so that was reassuring.
I’m curious about this mindset bit, because this has been an area that you’ve actually talked a lot about. In 2007, you stopped working with your father as closely as you were, went to work with a sports psychologist. At what point was it clear to you that this mental aspect is going to be super important to your success?
NR: That became clear to me in my first year of F1 because it was mentally just an enormous struggle. We had a bad car, so we’re either breaking down or finishing well out of the points all the time and it was a really rough start to my career.
And this is with Williams at the time?
NR: Yeah, with Williams. At times it was almost as if like, “Oof, I might not get taken on for the second year”, because it was such a rough start. So mentally, it was incredibly hard because my dream is at stake, my dream is to be an F1 driver, to win races, so that was difficult.
So I decided that, “I’m spending four hours a day on training my body, why am I not training my brain? There must be solutions out there to improve my mental state”. So I sought out help, and I found a psychologist/philosopher and this was incredible for my life, for my performance, I worked 10 years with him. In the winter, two hours every two days, so it was like an incredible effort, it was harder than the physical training was actually the mental training.
It was a combination of learning to meditate, learning to visualize, to learning the power of repetition, and also learning to understand myself better. “Why am I scared?”, “Why am I anxious, jealous?”, because then you cannot switch those emotions off very easily or almost not at all. But when you understand why they’re there, you can really adapt your reaction and that has a snowball effect, because when you react in a much better and more appropriate way, it has an enormous snowball effect on your life so it’s these kind of learnings that really helped me so much.
Was this pretty novel for an F1 driver to seek this out and do this sort of training at the time?
NR: Yeah, it’s a bit like in the startup world. Founders are not really allowed to admit that they’re scared of failing or that they’re working with a brain doctor, as some like to call it at the time in F1, so it was not something that I could really tell anybody about this because it would look weak in a way, but actually it became my superpower to go through that process. And now there’s a little bit more acceptance now, there’s been a couple of other drivers talking about it.
I think even Lando Norris, the world champion last year, he sought help in the middle of last year as he was struggling mentally, clearly, and his championship was slipping away from him, and he went out and sought help and made enormous progress, and that’s what got him the world championship in the end so that was great to see.
Lando’s always interesting because he seems to wear his insecurities on his sleeve, they just come through sort of so tangibly. Did you feel a lot of like sympathy for his sort of struggles and working through that?
NR: Yeah, totally. That’s the state of mind that I can very much relate with, and that’s what people love also because he’s very authentic, so that’s really appreciated.
At the same time I wrote Lando a direct message on Instagram and he never replied, but at least I wanted to see if maybe he would read it, because I’ve been through what he’s what he’s been through, and one of the obvious things that I would change if I was Lando, and he did change it a little bit, is to not always talk about the glass half empty, even when he was on pole position he almost only spoke about that one corner where he messed up rather than like, “Hey, that was almost the best lap of my life”. I mean, both is right. “Hey, that was almost the best lap of my entire life”, that would be correct or, “Ah, damn, I messed that last corner up so bad”, that would also be correct. You know? And he just says, “I messed that last corner up”, and, “I need to get my stuff together”, and that’s just unnecessary because it’s repetition, and it really ingrains itself in your mind that you always, if you say, “I make mistakes always”, you’re really going to believe that you make mistakes always. So that’s something that he could quite easily just adapt, even if he keeps on thinking that that, but don’t say it, and don’t say it out to the whole world, because that’s a whole tsunami that you’re setting off there repeatedly, which is not going to be beneficial to your performance.
You’ve talked about talking to founders and not being able to show weaknesses. Have there been any examples in the times that as you’ve been an investor and talking to different companies, where you’ve identified someone and been like, “Look, you’re kind of a Lando Norris here” — maybe that’s not the words that you used — but, “Let me talk to you about your mindset and how you can shift that”, has that come in handy yet?
NR: I really enjoy that because founders are really very similar to high performance athletes.
How so?
NR: They’re extremely competitive, their drive is unbelievable, they’re very courageous also, because you have to be so damn brave to bet the company over and over as you’re innovating and pivoting, so there’s great similarities, and that’s why I really enjoy speaking to founders.
Just now in the Bay Area, that’s very often the topic that I speak to founders about and they enjoy that as well, to discuss that kind of topic mentally, how they approach that and everything, and so that’s really enjoyable. I think I can really add value as well as I learned for myself also, but I can really add value by adding from my experience.
The more founders that you talk to, is there a bit where — if you go back to F1, it’s very visible who’s the best, like it’s very measurable in a certain sense, but it’s interesting at F1 because sometimes you could have a great driver who doesn’t have a great car, and yet people will still say, “That person is excellent, they’re just limited by their circumstances”. Do you get a similar sense in being in tech, dealing with founders, and being able to separate the circumstances from the person and saying, “There’s something there even if the circumstances aren’t allowing it to show”?
NR: That’s one very, very important ingredient for a successful founder, because actually it will be often many, many years until there’s any validation as to what he’s building or she’s building and the best founders have to be extremely resilient and not feel the need to bow to consensus thinking of people around them or of their board or whatever. They are the visionary and they have to believe with such high conviction in their idea, in what they’re building and see it through. Because if it was obvious, then everybody would be building it, and most of the time, they’re creating something that’s just not obvious to sometimes anybody except for themselves in the early stages, so that’s absolutely a very important trait.
However, in combination with an extreme curiosity and desire to learn and remain open to new ideas and everything, so it’s a balance that has to be found. And again, that’s pretty rare to find both attributes within a founder, but usually that’s the case.
Is that tension between the sort of insecurity and confidence and uncertainty and curiosity? Is that what you’re zoomed in on, what you’re looking for?
NR: Yeah, totally. Because sometimes it’s like it opposes each other.
Right, it’s a paradox.
NR: Someone who’s very self-confident their idea will be will be completely arrogant and just so sure that their way is is the right way and that’s it and then they will not be very curious, so that’s why you don’t find it in every person and it’s important. I think these two character traits are very, very important.
Promotion
Continuing with the background, you have a YouTube channel that has 1.46 million subscribers, you haven’t posted on it for a while, but there used to be a whole host of videos. But I went back, scrolled all the way to the bottom, and the original upload was in 2011. A lot of people didn’t know what YouTube was at that point or barely did, how did you find YouTube and why did you start posting videos?
NR: As an athlete, there was an opportunity that suddenly that came in those years, which was to connect closer with those out there that were supporting me.
Were you the first one to really do that?
NR: No, not the first, but I joined some of the early movers and it was amazing to see how you could directly connect with your fanbase, and there was also the belief that, of course, with time, Formula 1 is also about marketing and that can give you an edge over some other drivers. If you build a big following, a big brand for yourself, and you become highly relevant to brands for sponsorship, etc., then a team might choose you over someone who just drives fast.
So there’s also that element that to be a successful F1 driver, usually it helps to really try and excel in every single domain that may be relevant and that domain plays a role, as well as working well with the media, because the media is so powerful and that’s a game you also need to try and nail.
I’m curious about the sponsorship angle. F1 obviously has huge amounts of sponsorships, it’s an amazing sport where people will willingly wear gear with a bunch of sponsorships on it — I guess all racing is sort of like this. But right now, now that tech is huge and F1 is huge, there’s a lot of tech sponsorships of F1 and I’m just sort of curious: I’m in tech, but generally a lot of these companies are enterprise companies, a lot of B2B things, and this whole world of sponsorships and what goes on around that is somewhat foreign to me. I’m just a blogger here in Wisconsin before in Taiwan, what is in that game and how involved are the drivers? Is that a huge thing? You have to go out and actually help win these sponsorships too? Or you should show up to a bunch of events? I’m just curious, how does that world work?
NR: So a few things here. First of all, because of Netflix, the sponsorship fees that the teams are now requesting are like 2-3x from what they were just six, seven years ago.
Is that just because it’s more popular or because they also their logos also show up on Netflix?
NR: Because it’s so much more popular and because it’s now become relevant in the US. So the whole tech industry has become interested and you’ll see most companies are now also sponsoring. I mean, look at just the Mercedes team, of course, but look at the Audi team also. They have Revolut, so the bank that’s come out of the startup ecosystem, ElevenLabs, the voice AI global Leader, all of these companies.
In fact, I’m actually, because I’m so deeply connected now with Silicon Valley, I am more and more also kind of casually supporting some of these tech companies with sponsorships in F1. I’m just presenting one dev tools company, multi-billion dollar, with an opportunity to sponsor a team this week, I’m just sending that through.
Because the sponsorship fees have increased so much, a team like Mercedes has $400 million in annual sponsorship revenue. $400 million! That’s so crazy. And then you add their share of TV revenues on top, so they get to beyond like $600 million in annual revenue, and because they inserted budget caps in F1, they don’t spend more than $300 million, even including driver salaries and everything. So they are so hugely profitable, these F1 teams, or especially the successful ones and that’s why the CrowdStrike founder now, George Kurtz, he just bought 5% of the Mercedes F1 team. And that stake, I mean, the Mercedes F1 team was valued at $6 billion, unbelievable. you know so so he paid three hundred three hundred million dollars he paid for a five percent share.
Do you feel like you were 10 years too early?
NR: I missed that train, because I think with a bit of effort probably at some point I could have had a nice little share in a F1 team somewhere, but I completely missed the train. It’s incredible how this sport has become has become really a business case now, and these these F1 teams have become investable assets, which never used to be the case, so it’s quite phenomenal.
So these sponsors, we drivers spend a lot of time with these companies then, they invite all of their customers, I do dinner with them then even during a race weekend or the next morning for breakfast. Monaco Grand Prix, I’m at the Hotel de Paris having breakfast with one of the sponsors, so the drivers do spend a lot of time with those sponsors.
And apart from that, the sponsors want visibility because visibility for their logo is just an amazing credibility stamp, and also they want to bring and host people at the races, so that’s what it’s about and I think it works amazingly well.
I was talking to Michael Cannon-Brooks, Atlassian is now sponsoring Williams, and this idea of you actually have 24, or this year 22, around the world, pre-planned, clear places to meet customers and bring them there. He’s like, “It makes scheduling very easy, it’s very straightforward”.
NR: And for someone like Atlassian the customers are there anyways in the paddock, because the C-levels of all big companies are always there. To make deals in the paddock is incredible, an incredible opportunity and even I myself, so I do work for Mercedes F1 and they don’t actually pay me in Euros, they actually pay me most of the time with tickets for the F1 races, because I too, I love to host the VC community at the races, it’s such a great way to get to know people, build friendships and of course, yeah, it’s very important for me to really build relationships in this ecosystem.
Winning the World Championship
Speaking of Mercedes, when Mercedes rejoined F1, acquired Brawn, you were the first driver alongside Michael Schumacher, who was then replaced by Lewis Hamilton — two pretty impressive names to have as teammates to say the least. The rivalries between teammates is the stuff of lore in Formula 1 but is it actually underrated how intense that is?
NR: So the norm in F1 is always that a team has a number one driver and a number two driver and that’s clearly kind of set in stone, and that’s the way you go racing. It’s very unusual that a team has two number one drivers, the most legendary such pairing was Ayrton Senna and Alain Prost at McLaren, and that ended in total disaster after only two years. They were crashing, then one guy quit, and it was just a total mess.
It’s okay and not too bad as long as you’re racing for like fifth and sixth and seventh place — but as soon as you have the best car and you as teammates are fighting for every single race win, it just becomes so hard because you’re always going to push the boundaries and go into those gray areas because there’s a championship at stake and that’s your childhood dream and that’s what then happened between Lewis and I also.
It kind of just spiraled from one going a little bit too far, then the other one paying back and then back again and then crashing and it just became very, very tense and difficult to manage. It was a very uncomfortable environment to be in because not only are you kind of enemies within the team, but also the whole team as such cannot really take a side anymore and they need to stay neutral, so they can’t really support you either anymore, so it’s a complicated dynamic.
Well, you lasted longer than Prost and Senna, because I think you made it three years with Lewis Hamilton. Is that right?
NR: Four, actually. We would have kept going, I had another contract for a few more years so it was kind of borderline manageable, but only after Toto Wolff made us sign a contract whereby it didn’t matter who was at fault, but if ever we crashed together, then we would have to split the bill, the repair bill, 50-50, and my most expensive one was $360,000 and after that, I made sure to leave extra space when Lewis was anywhere close.
(laughing) That’s amazing. Why did you decide to retire? I mean, you finally win, you overcome Lewis, and then you’re done at 31.
NR: I gave it a thousand percent, really, much more than any that I thought I could give. Total life commitment, insane intensity, the whole thing, mentally, physically and I achieved my dream, I achieved my dream in the best possible way, I beat the greatest of all time, I won that Formula 1 World Championship with Mercedes, the legendary car brand, it’s not possible for me to do better.
I had a young family at home, a child at home, baby at home so it just felt like the right moment for the most beautiful exit possible for me that would carry me for the rest of my life. So it was a bit of a rational decision in that way and I just felt that was what I wanted to try and do.
Of course, it was scary because when you make such a decision, you don’t really know how it’s going to go and how you’re going to feel. But now in hindsight, for me personally, it was really the best thing I could do and a great decision, which I’m very lucky to have been able to exit in that way. And a lot of founders listening, because I know you’re very popular with founders, also your podcast, they will be able to relate, it’s kind of the $10 billion or $50 billion dollar exit.
Yep.
NR: Once you put your life into it and you’ve created an enormous success and change people’s lives and then you go out on a high, I think that was my dream to do it that way.
You made a lot of changes before that last year, too.
NR: Yeah.
But then there’s all these stories of that last year where you won the title, focusing on things like jet lag or like your nutrition and all those bits and pieces. Was that just like, “I have to figure something else to finally get over the hump”?
NR: I tried to perfect every single possible marginal gain possible, that was really what I was about, and it went from working with a Professor of Sleep at Harvard, and who now has created a startup based on what we were working together at the time called Timeshifter, actually, which is a nice anecdote.
And so there, for example, the secret was eliminating jet lag for the whole year because jet lag is a disaster. As an athlete, the difference between 99% focus and 100% focus is the difference between coming first and second, and jet lag just destroys you, and we’re traveling from continent to continent all the time. I managed to do a whole season with absolutely 0.0 jet lag, and it’s pretty simple. Of course, it takes a lot of discipline, but pretty simple.
The secret was one-and-a-half hours maximum of time shift per day and then blackout glasses in the evening, two hours before needing to go to sleep and then also immediately upon waking up, 10,000 lux, like a light, you know, which you’re staring into, which you also see with Bryan Johnson, he does that and then, yeah, I mean, as long as I followed that, it was incredible. So I eliminated jet lag from my whole life for that year and every detail I worked on in that way, you know, really everything.
So you see my helmet was black and it was bare carbon because I realized that the helmet was 80 grams and every gram counts in our sport so I took the paint off my helmet, just every single detail. I really tried to work on every single marginal gain possible.
This sounds absolutely hellish with family and little kids at home. I can see why you once you accomplished it, you were done.
NR: Yeah, of course. I mean with a little baby at home it required a lot of a lot of a great commitment also from my wife Vivian at the time and great support and and she did that awesomely so I’m very very grateful for that.
The Path to VC
Now you’re sitting here as an investor, but we’re a decade on from when you retired, what was the path to get to where you are now and to realize that, “This is what I want to do with the rest of my life”?
NR: Seven years after retiring was first of all, just trying everything and nothing, trying to figure out what could be next in my life. And it’s hard because as an athlete, you are like CEO, you know, you’re top of the company, and you feel like being the king and then after your sports career you drop to zero. There’s nothing there and you cannot use your skill that you learned for something new, it’s just gone. And it’s very hard to accept that you really start from zero and you don’t even know if you’re going to have success in something new or not.
So I tried a lot of things and and now finally I’ve landed on what I really enjoy doing and it’s being fully into the venture capital ecosystem building my own VC firm, Rosberg Ventures, out of Europe, investing a lot in the USA or even primarily in the USA. So super exciting and yeah, and I hit the ground running and I’m able to win also pretty quickly, which is what is really motivating.
What made you realize there was this opportunity? If you sort of zoom out, this idea that there’s money in Europe, there’s opportunity in the U.S., someone needs to connect those two things together. But was there a specific conversation or something that came along that’s like, “Oh, I could actually do this and be good at it”?
NR: Well more than money in Europe it was money in my bank account which was just sitting there.
That makes sense.
NR: And I was like, “What am I going to do with that?”, because it’s really really hard to invest capital across generations in a smart way. It’s like super, super difficult, as most people will know that or many people know.
The way led to the Yale Endowment — everybody who’s interested in finance has once looked at the Yale Endowment because David Swensen is the gold standard for investing capital across generations. And my light bulb moment was then seeing that David Swensen had by then put 20% of the Yale endowment into venture capital, 20%, that’s $8 billion, and it was by far his best performing asset class with 21% yearly performance, 21% IRR.
So that was my light bulb moment because I said, “Wow, I love startup anyways”, but I didn’t know you could make an asset class out of this, “Let me try and replicate what David Swensen did”, and I believe that with time because I have my unique angles, including F1, that with time, I can also build the right access by adding value into the ecosystem and everything to kind of replicate the approach that David Swensen took to the asset class. And that’s where we are now, we actually made it work.
What are those unique angles? I think that sort of ties this together. You have the F1 background, you’re European.
NR: So the unique angle, of course I have the F1 platform, which is a really unique advantage to be able to meet people from the VC ecosystem, make friendships, get insights.
Appear on this podcast.
NR: (laughing) I’m very, very lucky in that sense.
But that’s something you seem to think about very strategically. Like, “This is an advantage that I have, I’m going to exploit this and push this”. Is this part of the thesis up front, particularly once you started?
NR: Well, first of all, I really enjoy welcoming this incredible community to my sport, it’s amazing for me to be able to showcase my sport in a way.
So this is where you did better from Drive to Survive in the end, because even if you sort of missed that era, now suddenly everyone’s interested in F1.
NR: Oh yeah, definitely, I would not be here today if it wasn’t for Drive to Survive because that’s what has really engaged the whole tech community in my sport. It’s lovely to be able to invite people, bring them up close, show them what my sport is about, and see how excited everybody is and to share that with them is really amazing, so I enjoy that. And it’s a great opportunity to, as I said, build friendships and get insights, but then also to add value.
How does that start? First of all, of course, curating the group that I invite. I invite the founder and then I invite the CIO of a big company and they then actually have a very valuable exchange. The CIO happens to be looking for the product that the founder is building, the founder obviously needs to go to market, so there’s a great way for me to build connections, and that’s how you start adding value. And beyond that, what we do is also we bring U.S. innovation to the German large corporates, we help with that.
So Germany is your specific focus in particular in Europe.
NR: Because I’m German, and because of my history and everything, I’m very well connected in Germany to all the C-levels in the large corporates.
Does this even go back to like not just growing up in Germany, but also working for Mercedes, being the driver who’s interacting with all this?
NR: Yeah, of course. All these large caps have been sponsors in F1, they’re all in the paddock, so I know them very well, and they’re all in desperate need of transformation now. Of course, there’s AI, there’s sustainability, there’s all these points and they’re not exactly the fastest, the German companies. They’re a little bit — many of them are real legacy businesses, who are not necessarily known to being the most brave when it comes to adopting new innovation and things like that.
And are these generally like just regular companies, like manufacturer companies, things like that?
NR: It goes all the way to the car manufacturers, whether it’s BMW or Mercedes and we have found a unique positioning where we’re able to support, just selectively, with bringing their attention to a couple of products that are just being built in the US in the startup ecosystem, whether it was vibe coding or it’s even legal tech, all these different things, and we can bring their attention to some of these innovations and really add value by creating these connections. So this is one of the secret sauces to Rosberg Ventures and to adding value, which works very well, and we’re hosting dinners with some of the C-levels and inviting some of the startups, etc., and it works very well.
So you recently announced a new fund, $200 million assets under management. How did you grow your network on the asset side? Is that mostly then German money that’s coming back to the U.S. and you’re completing the cycle there?
NR: Mainly German, so it’s German capital because the Europeans really lack connectivity, I realized that the Europeans lack access to U.S. venture capital and they know of the importance and the value that’s being created there, but they don’t have the access and they really kind of miss the boat on that, so it’s not too easy to convince them that, “Hey let’s join forces and partner up here, and let’s invest in the best opportunities in the U.S.”.
So that’s been working very well and my way to raise or to convince these families is really going via the principle who I may know from F1 or whatever and then I say — I don’t even say too much like what i’m building because you don’t want to sell straight away — it’s more like, “Hey can you introduce me to your family office? I would love to just have a conversation with them”, and then the introduction, and I speak to them, I explain what we’re doing, and it’s just an obvious one.
We’re kind of indexing the top 10 VC funds in the U.S., and also the top 10 growth stage companies, startups in the U.S., and indexing those and it’s kind of a no-brainer then, that’s how we’ve been able to raise capital very, very quickly.
That makes sense. So everyone sees the opportunity, it’s not clear to get the capital in, you go in first sort of as like a seed investor with your own money, and that sort of starts that virtuous cycle, and that makes sense and then they get access to the German market in the long run. You’re bringing a unique angle and it’s just all about deal flow, I think it’s pretty compelling.
Why is it so hard to do business in Europe? Has everyone just given up on having a big startup ecosystem there and, “Let’s just get our money into the U.S.”?
NR: So you mean the startup ecosystem in Europe?
Yeah.
NR: There are flashes of real hope at the moment. Vibe coding was pioneered in Europe, the vibe coding for prosumers, that’s Lovable out of Sweden, and there’s many other examples. I mean, ElevenLabs, the global leader in voice AI, European, and many, many more examples. So there is flashes of real hope.
But of course, we lack the breadth in the whole ecosystem and that’s as a result of a few things. It’s a bit of a chicken-and-egg. One, of course, it’s much harder to scale in Europe because of the geographical limitations, it’s so hard to go from Germany to France, different language, different regulatory framework, it’s just a huge friction there in the go-to market, so that’s one challenge. And then historically also, there’s been quite a lag in the distributions and liquidity in that asset class in Europe and so therefore, funding is not as ample as in the U.S. So it’s kind of a chicken-and-egg there also.
But I think Europe is really working on trying to introduce one regulatory framework across the entire Europe, across all countries for startups, so that’s in the plan, so a lot is happening, and let’s see if Europe can develop more and more such promising companies.
How have you managed this shift? You started out sort of a fund of funds sort of model, then you mentioned you’re doing more direct investing. Is that just a natural evolution of getting more access, having more assets under management? Or what was that explicit goal and strategy that you were seeking to pursue?
NR: Well I think the holy grail in venture capital is is to invest directly in the startups and the fund of fund was the natural starting point from an asset class point of view, also from from copying and being inspired by what Yale did, and then from there the fund of fund is like a Trojan horse because it gets you positioned well into into the market where you see everything and then it really helps to identify which are the breakout startups, which are the most promising with the generational founders. So it really helps to create a short list and also to create those connections and to build those opportunities to actually invest directly in the startups.
We met in San Francisco a couple of months ago, you had just met with Dreamer, I actually met with them the next day, they launched and were immediately acquired by Meta, was that your first exit of a direct investment?
NR: So this is an important point that I don’t just like try and support the companies that I’ve backed. So in this case, this was the CTO of Stripe, the ex-CTO of Stripe, who was my friend, David Singleton, he built this together with Hugo [Barra], who used to have a senior role at Facebook.
Yep, I knew him when he was at Xiaomi, he was at Google, he was at Meta, he’s been all over the place.
NR: Everywhere, it’s an incredibly promising founding team, and so I was just trying to support. And they happened to say that Stratechery, that they were the biggest fans in the world of you and Stratechery, so I was like, “Okay, well, that’s easy, I just met Ben yesterday, so I can make the connection there”. Yeah, it’s a pity how that went — I mean, pity because also from our point of view, I was so excited about that product, actually, it was vibe coding AI agents.
Yep, it’s very compelling. I was looking forward to writing about it, they got snapped up before I could even get there.
NR: I was looking forward to really using it at scale, but, yeah, now it’s bought by Meta and let’s see what Meta does with it, but it will certainly be, I’m sure, very promising what they build with that.
Maximizing Opportunities
As you’ve made this transition and levered up into tech and going from fund of funds to direct investment, it’s a time of great upheaval in tech, given AI. Theoretically, this should mean more startup opportunities. On the other hand, the frontier lab models might just eat everything. How are you thinking about that as an investor? Is it like, “I’m finally getting to the stage where I can get into startups, and now I’m not sure that I want to”? Or are you optimistic?
NR: I’m very optimistic. I’m very optimistic because AI, the value creation within this wave of AI is going to be something like we’ve never seen before, and I do think there’s a lot of opportunities beyond just the frontier labs to capture market share, create new markets.
But at the same time, you do need to be careful because we see the legal tech. Legal tech is a really big new market that’s being created there with a leader like Harvey and Legora, the two leaders, and then now Anthropic came out with a product which kind of starts to threaten their position a little bit. And Anthropic has been doing that for every sector, it feels like almost, so that is a little bit of a concern. It does feel like a safer place at the moment to be invested in frontier labs and neo labs, that does seem the more safe place to be.
But nevertheless, I think there’s like, for example, Elevan Labs, voice AI, it’s very defensible what they’re building. They are a frontier lab themselves, by the way, because they build their own models. But still, voice probably is going to commoditize, the research, as in many cases and there it’s then going to be about the platform, distribution, products. And there, ElevenLabs is doing an excellent job. So it does look at the moment like they’re going to be able to really win and sustain any potential threat from these frontier labs so there are examples where beyond the frontier labs, many, many examples where they can be success stories, so it’s an exciting time.
You mentioned platform and distribution, and this sort of seems to be a theme: you’ve thought about the F1 reputation and background, “I can leverage that, I know these sort of companies, I can leverage that”, you saw YouTube early on, you were on that, you’re here on this interview. Is that why you still do Sky Sports? Everyone’s favorite commentator, is that you love to commentate, does that keep Nico Rosberg sort of front and center?
NR: You’re right. I do enjoy staying connected with the sport, but there’s the second reason that it’s really helpful for me to stay kind of relevant and it does help me also with relevance, even in the tech ecosystem. Because, of course, if then some people enjoy watching me and things like that, it’s easier to connect with them in future, even in the tech ecosystem. So that is twofold.
We talked before, you were born with sort of steering wheel in your crib, in some respects, a advantageous background. But what I see as an overall theme is pretty consistently you identifying and leveraging your advantages and like what we just articulated is a good example. So now you’re in the investing world, totally separate, but figuring out what you have, how to work with it and build towards that. Is that the overarching sort of theme that you see in your life? What still drives you, is it that bit about being a little bit insecure and wanting to prove yourself and being super competitive? Is that just like you can’t turn that off and that’s what that’s why you’re still here?
NR: I’m a super extreme competitor, I need to compete, I want to win, and I have now chosen venture capital as my space to try and win more and more in future. And I think, yeah, this is what I’m carrying over from the sport. I was very methodical about how do I get that win, in sports, every detail. I worked on every single detail possible to put all the pieces together to be the best that I could be and to get to that win eventually and I think that’s something that I’m now replicating in the world of venture capital, trying to optimize for everything and put everything together to be able to win more and more.
How do you think about that with your kids, just out of curiosity? Your daughter sort of popped into the background on the call here.
NR: So with my kids, because I went through such an extreme intensity in my sporting career, I, with them, am more focused on well-being rather than pushing them towards some success.
But at the same time, you just credited your massive drive and competitiveness with your success.
NR: Exactly, yeah, but wellbeing and happiness is what I put at a higher level for my kids and that doesn’t necessarily have to be success. So I’m very eager to push to try and help them discover their real passions, and we’re getting there. So my daughter, I put her in a go-kart two weeks ago, she drove slower than I could walk, so I could walk faster, and she ended up crying, so I hope she doesn’t listen to this one day, but I don’t see which one it is either, so we’re fine because I have two daughters. So it was clear that this is not her passion, and then we will never go again. But I can see that her passion is music, guitar, singing and so there I do nudge her towards more lessons, guitar lessons, drum lessons, without overdoing it, because I see that that’s her natural passion, you know? So that’s the approach I’m taking, but definitely really focused on happiness and well-being.
So you mentioned you’re on holiday in Ibiza. I understand you have an ice cream shop there, is that right?
NR: So yeah, with my wife, because she’s an interior designer, so she’s super creative and for some reason, we both of us, we love ice cream and we’ve been coming to Ibiza all our life, and there’s never been a nice ice cream place. So just as a hobby, we just said, “Hey, why don’t we open one ourselves?” — our friend, our common friend, he likes to make ice cream, so we do that, and it’s become a huge business. We have now a chain here in Ibiza, and very successful, and it’s the number one ice cream place. So Ben, next time you’re in Ibiza, ice cream is on us.
(laughing) Sounds like a deal. You have an interesting life in terms of you learn five languages growing up, you have parents from different countries. Obviously, as part of being an F1 driver, you’re all over the world. You’re doing this connection between Germany in particular and Silicon Valley. Do you feel like, you talk about eras and riding them and starting and beginning in terms of F1 — do you feel that era, you’re like the pinnacle of like globalized civilization? Do you feel that that is an era that is going to persist past you, or do you feel that sort of cracking and changing?
NR: This is related to the sport or?
Just in general, just given you are like an international man of mystery, although maybe not that mysterious, but it’s like your superpower is connecting and linking all these disparate pieces together and seeing the ability to sort of build through them. And I’m wondering, is that something, an opportunity, that you think is going to persist given the way the world is going?
NR: Well, I’m very optimistic in that sense, I’m very optimistic. And I see a long road ahead. And I think it’s an amazing time for venture capital now, it’s incredible, a time that we’ve never seen something like that before, the speed of innovation, and there may be my F1 speed also helps me, it doesn’t scare me at the moment because I’m used to driving 220 miles an hour. So maybe I’m one of the only people in the world where I’m not getting scared by the speed of innovation that we’re seeing in the startup ecosystem, because I’m quite used to speed.
Paddock Talk
You actually focused a lot on e-mobility and electric vehicles. I do have to ask you, how are you feeling about the current F1 regulations, this 50-50 split? A lot of complaints that driver’s skills being taken away. What’s your view?
NR: I saw a message from Toto actually recently, and he said, the F1 driver job might be the very last place that AI is going to endanger that job. Because it’s very, very hard for AI to try and replicate what we are doing in that racing car at the edge of physics.
But has it been diminished a little bit if you’re going around a curve or you’re on a straight and your car’s just slowing down on its own?
NR: No, I understand, F1 has tried to stay technologically relevant so they have gone full hybrid which is one of the most efficient powertrains in the world, the way they’ve done it, but of course yeah it’s a little bit to the detriment of racing on the edge, because now they’re going through a high speed corner towards the end of the straight and they actually downshift on the straight after the corner which is unheard of in the sport. But to be honest I’m quite easygoing about that because I like to really focus on just, “Is the racing exciting?”, “Is there good battles?”, “Is it unpredictable?”, “Is there rivalries?”, and as long as that’s happening, I think all fans will kind of forget about these regulations and will just enjoy the sport once again and be super excited.
I think the season is shaping up really nicely. We have this super underdog, this 19-year-old who was really having a struggle last year, who suddenly has come to life and is showing his real talent and is dominating the championship so far, 19 years old, he’s still like a child, it’s incredible, Kimi Antonelli, Italian guy, driving for Mercedes. So it’s so exciting to see him in front and now everybody else trying to catch up to him, I think it’s great.
You are associated with Mercedes, they are doing very well, I am a Kimi fan, my kids got a picture with him last year, so he’s by default who we’re cheering, for sure. But who do you cheer for in F1?
NR: I do cheer for Kimi as well now because he used to be my driver in go-karting as well, so I know him since he’s 12 years old, and he is a generational talent of the level of [Max] Verstappen, Hamilton. His talent is exceptional and he’s so humble and authentic and nice guy also, so you can only cheer for him.
It’s such a challenge that he’s facing, being a driver of the Mercedes team, leading the championship all of a sudden, an incredible challenge, and I can so relate because I was in that position and it’s so hard. It is so hard what he’s getting himself into now for the rest of the year. I’ve been writing him also and I said, just without telling him what he should do, I just told him like what I did and what worked for me, I’ve been writing him. And one thing, for example, was just really take it race by race, don’t think about the end of the season, don’t think about championship, just race by race, try and optimize for the next race, go in to win, and that’s it and then the rest will just see how it goes.
Are you surprised it’s been a decade and Lewis [Hamilton] is still in F1?
NR: I am quite surprised, because that’s a long time, and we weren’t exactly young at the time. So when I stopped 10 years ago, he was already almost 32 and he’s still going now, which is incredible and huge respect, respect for him to keep going, keep grinding, keep the motivation. Still seems as motivated as ever, driving really well again this year, he’ll definitely win some races this year, I think he’ll win some, so he’s doing really well.
And every win that Lewis gets is another notch on your belt, right?
NR: (laughing) That’s a little bit of an egotistical view to it, which sometimes I do think about. Yes, the better my success looks, which is nice, yeah.
You won one, you beat Lewis. It’s a championship, if you’re going to win one, that’s about as good as it gets. But, hey, you didn’t stop there, it’s super impressive what you built, very interesting to learn more and I look forward in 10 years when Nico Rosberg is the champion VC investor. What is it, the Midas list? Are you gunning for number one?
NR: Yeah, sure, Midas List, that’s gonna be a hard one, but those kind of targets, at some point, yes.
Nico Rosberg, great to talk to you.
NR: Thank you very much.
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