Nico Rosberg on the Booming Business of F1 | All-In Live from Miami
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Former F1 driver, champion in 2016. He's getting into the venture business. Please welcome Nico. They started the season with 20 drivers and they would end the season with only 18 of them left. Wow. What was the craziest you've ever been involved in? Well, my rival was my teammate. So unfortunately it really becomes like an enemy in a way. What were your first few deals? 11 Lads, for example. Holy shit. Good for you. This used to be an extremely dangerous sport.

You had people dying every year in these tiny little cars with no roll cages, et cetera. But over time, it's become incredibly safe. The number of people dying went from a couple dozen a year in the '50s, '60s, '70s, and now it's gotten incredibly safe. How scary is it to drive in those cars? And how do you get over that fear of death?

First of all, hello, everybody. That's a pretty intense start to the conversation. I just... Good job interviewing J.K. World's best. I got to get right to it. How are you still alive? Welcome. How are you? Why haven't you died yet, Nico? I looked at that

- Justify yourself. - Why is there no canopy on it? Why is your head exposed? It's so crazy what you're doing or what you did. - So, no, you're absolutely right. And I know better than most people also because my father actually was a Formula One racer. - Yeah. - And he was racing. - And a world champion. - And a champion. - I didn't want to say, but yes, he was also world champion. - But you were, sorry, I asked you backstage. You're one of only two father-son world champions of all time. - Yeah, that's true, yeah. - Pretty incredible. - Which is very special.

So, I mean, your dad's out there racing. You're at home with mom, I assume. This has got to be terrifying to watch your dad do this. So in his day, they started the season with 20 drivers and they would end the season with only 18 of them left.

So it was a 10% chance, more or less, that you wouldn't make it through the season, which is just, that's crazy. Wow. I mean, then if you do an eight-year career, like, what are your odds? Like, that's not looking very good. So there to your point. Yeah, it was a death every 100,000 miles. Now it's a death every six, seven million miles. I was very lucky because by the time I came in, they had carbon fiber chassis,

They have a roll hoop now, you know, and this protection, this halo around your head, which recently saved a couple of lives in the last five years because Max Verstappen, who's now the four-time world champion at the moment, he landed on Lewis Hamilton's head.

in Italy with the full car and it was this halo that saved Lewis Hamilton's life. So we're very, very lucky how the sport has progressed with the safety. How did you start driving? How old were you? Because I didn't realize yesterday I go into the...

suite that we have and they say this kid is 18 years old as a driver. I had no idea that kids that young were driving. How old were you when you started? And at what point did you start to become competitive? So it's a bit like with every sport that you have to start very, very young. I started, I was six.

Sorry, go-karting I was six and then racing 10 years old. Now they start racing when they're eight years old. So Antonelli who was on pole position yesterday, the 18 year old. Yeah. He started racing, he was eight. He was in my go-karting team when he was 12. So I know him very, very well. And he is a generational talent.

but it's very early for him because he's only 18 and he took over the car of the greatest of all time. Lewis Hamilton left Mercedes to go to Ferrari and Antonelli took this car from Lewis Hamilton. That is insane pressure. Answer this question if you could. You said generational talent. I'll try my best. So if we had to design some kind of a model, could you define the features

that he had when he was six, seven, or eight years old that could have predicted how good it was? - Yeah, like is it the midichlorian? - So, is it the what? - Well, Anakin Skywalker was really good. - I don't know, Nico, but I'm quite a specialist on Star Wars lore. - But you, yeah, anyway. - The midichlorian defined the Jedi Knights. - Nico, do you think that you could

design something where people, kids could come and take some kind of test. You look at your reflexes or your, you know, your eye twitch speed or the way your brain works. And is there a pattern, do you think, that is genetically predisposed, predisposes some people to just be exceptional? So we've not come to that point yet that we actually go through such tests. But I think there are a couple of things that would, that would kind of satisfy that. And one is your speed of processing.

Because in a race car, you're going at 220 mile an hour and you have so many inputs flying at you and not only visual, also sensual, everything and also sound with the engine and everything. And you have to process that so rapidly. How did you train for that?

I even had a computer program which I developed just for myself actually where I would have all these different inputs so audio, touch, tactile, had like a thing around here and even then visual on the computer and I would be

catching these inputs like and trying to break my record and the faster I would go the faster the program would go. So I was trying to develop these kind of things that to train my brain to move faster and react quicker. So reaction time is the key skill set of a driver? It's one of the ones. Is it also being courageous and like

Something with your amygdala where like you don't have fear? There's that certainly, yeah. Although I would say that I am actually someone who's quite fearful. But when you're in it, you kind of also get used to things, yeah? And you start to feel quite safe in the car nowadays because I'm not a crazy adrenaline junkie unlike most other drivers actually out there. You find that they are adrenaline junkies? Yeah, like someone like Verstappen is fearless, like completely.

or even Hamilton, you know, they're proper quite nutcases. The paths are a little different for everyone. Yeah, there's different ways, different characters. So there's a recklessness to the personality type. Then of course there's hand-eye coordination. So to your point, Chamath, for young kids,

probably there's a high chance that you put a tennis racket in their hand, they'll also be pretty good very quickly. And it's a similar set of skills. Can we shift and talk a little bit about the business of Formula One? I mean, we were talking backstage before the show a little bit and you shared some of the anecdotes about some of the valuations and what's happened over the last decade, decade and a half. Maybe you can...

Just kind of paint a picture for us on how this has evolved as kind of a business and where things sit today, where they're headed and what's driven that? Yeah, so I'm a venture capitalist myself and that's why I'm very interested in the business side of sport. And F1 has gone through such an incredible inflection and there's a couple of factors that have come into play. They brought in budget caps.

For the teams. So the teams were spending just on their car development, like north of 200 million a year. And now it's like limited to 130 million a year just for the chassis itself, not excluding engine drivers and top personnel. $130 million on how many cars is that like?

Well, there's 10 teams. Yeah. No, but is the 130 million... There's two cars, two race cars per year. Per year. But that's just the chassis. You then have the engine, which is another 70 million. Wow.

You then have the top driver who takes 50 million a year. Or 100. No, 100 no. That was the Verstappen rumor to go to. Yeah, plus marketing, plus, plus, you get to maybe 70, 80. So fielding a team is how much? Fielding a team is around, you get close to 300 million. Wow. Yeah. But you're saying that the budget cap allowed everything to kind of be constrained. Yes, because so the budget cap brought in this cap for developing the chassis to 130 million.

Then suddenly Netflix also came in and Netflix has just made the sport so much more popular. It's unbelievable. So that series really changed the landscape. Just in the US, you've gone from in the last couple of like six years, 20 million fans to like 50 million fans. It's more than doubled. Only in the US alone. What do you think Netflix did right?

So Netflix, the owners of F1 are Liberty, which is a US-based company. And they did very well. They opened up social media. The new generation of drivers are really social media savvy. The fan base is 40% women in America. How many women here today are F1 fans? Loads, there we go. Okay, not too bad. Are all the drivers as good-looking as you or no?

I don't want to go into that kind of stuff. Don't be too yourself in Miami. So the audience blew up. The audience has blown up and you asked me what did they get right? So what did they get right? The Netflix show, for those of you who've seen it, it's like a reality TV show. It's not just a sports documentary like, hey, this guy won here. But they managed to capture these

these personas behind the scenes and you really get to see the human beings behind the sport and that's very special and they tried to replicate it in other sports like I think golf and tennis and it didn't work out as well.

Because I think they got a little bit lucky also that here quite a few characters allowed them and completely opened up and allowed Netflix to capture the real intense behind the scenes moment. And it's just fascinating to follow. Yeah. So that's what works so well. Because before, if you come in as an outsider, I had this experience like, what team are you, you know, who you support? Like,

Like I'm not really sure, but once you get to know the personalities, you have a vested interest, you have a history, there's something that you can contextualize. Let me just end on the business part. So teams like 10 years ago, F1 teams were like worth $150 million and they would lose $50 million a year.

And now the top teams go for five to six billion dollars ten years later. It's like eye-watering, it's incredible. Do you guys bump into each other when you're driving the race? You try to like, yeah, bump into each other, you know. 100%, it's part of the game. You have to, unfortunately. Explain, because I'm a neophyte, I don't understand it. And I see like once in a while these NASCAR guys pull over, they get out, they throw their helmets at each other.

You know, they get really upset. They seem like... But they seem like hillbillies. You guys seem like a bunch of Europeans and...

Like, you guys seem like you're fancy, like a little more elegant. What do you guys do? Do you guys like spray with Glico on each other or something? Glico. How do you guys mess with each other? Nico wouldn't watch his TV. We had one guy push, it was for Stappen, push the other guy and he got like one week of community service. Shoved him. That was as far as it went. That's as far as the physicality. But when you're in the car... Yeah, it's fierce. It's fierce. So take us through, like what was the craziest you've ever been involved in altercation wise?

Well, my rival was my teammate. My rival was Lewis Hamilton at the time. We were both racing for Mercedes. Any Lewis Hamilton fans here today? A little bit. Okay, some here. Good. Actually, Nico, can you talk about that? In that period, he's so dominant, but the car is so dominant, and then you win. What is it like where you're teammates with your biggest competitor? What is that dynamic like, that psychological dynamic?

Are you friends? Are you guys friends? So with Lewis Hamilton, we were actually best friends when we were 14 years old. We grew up racing together in the same team, best friends. But when you get to F1, it's just so intense and so much is at stake. And if it's just the two of you racing for race wins every single time...

You can't stand him. You hate him. Yeah, it goes into hating, yeah. Yeah, like real hate. I can see the contempt. Do you talk during the week or you don't even really interact? No, you don't interact much. So unfortunately, it really becomes like an enemy in a way, you know, and internally...

in your own team, it's a horrible dynamic. Right. Because also even the rest of the team then need to start to be neutral. They can't take any sides. So even when you win, it's not like everybody's leaning in with you. Yeah, mixed emotions. It's really a tough situation. So it's like two people in the same project who can't stand each other, Friedberg. Yeah.

- But you keep working together. - Yeah, I wasn't gonna say it. - Nico, how much of that fed your decision to retire literally days after you won the... That was a little, I think that caught some people off guard. Can you just tell us what happened there? - Yeah, sure. I was in my prime and I won that championship, which for me was my dream come true. And it was extremely intense. Thank you. It was extremely... - Thanks, mom. - I got one clap. - Thanks, mom. - From my mom sitting in the other chair. - Yeah, she's a very big fan. - I'm just kidding.

Way to go, mom. Yeah, it was extremely intense. And for me, it just felt like the right moment to... I had a young daughter at home. She was one year old. Family. Just felt like the right moment. I was in one piece to your comment, it being dangerous. And I just decided rationally, you know, I never wanted to exit on the way down. That's something I definitely wanted to avoid. I wanted to exit at the top. And that was my moment. And I decided to pull the trigger. Has there been a good ROI moment?

for the car companies that have invested in F1 in that all this money that they spend, other than the notoriety, are they inventing things that we all use and see and interact with day to day in our own daily driving experience or not really? So you probably will be driving an AMG at some point? I had an AMG at one point. There you go.

And there is tech from the F1 team in there now. From the hybrid. So from Mercedes, yes. Is it universally true? Yeah, every car company will be benefiting. But the return on investment is also in terms of marketing. Mercedes, there's a calculated return on investment which is 2 billion worth for their brand annually.

And they don't actually invest money anymore because the team is profitable now. And highly profitable. These teams make 200, 300 million dollars in profit every year. So they now have 6 billion dollar valuations. Have we kind of peaked from your point of view? Is the market and the valuation curve still being climbed?

There's still a lot of upside at the moment because this growth has just happened in the last five years. And there's still, I mean, even America, there's still loads of growth potential, more races, there's licensing. The sport hasn't really even tapped into that yet. Do you think there's something about sports that are kind of more tuned to the way our brains now operate in a social media world, like a fast-paced world?

you know, golf became live. I mean, live really kind of changed the face of golf. There's now baseball is obviously dead. I mean, MLB has been on the decline for years in the United States. Not saying anything negative about baseball. I'm just saying that the viewership is going down. No, no, no, no. There's a lot of games. But there's also these conversations about basketball at the NBA. I'll tell you this crazy anecdote. I was a co-owner of the Warriors. I sold two years ago. A friend of mine, a friend of ours is in the market for a sports team.

and he went to europe to look at a bunch of soccer teams and then we were all having dinner and his bankers produced this study that showed exactly this problem which is young people their attention span is shrinking as it shrinks there are certain sports they just cannot watch and it's totally correlated the negative viewership in baseball the increase in the use of clips

So people are willing to watch baseball clips. They will not watch a baseball game to save their life. People will watch basketball clips. They won't watch basketball games. The NBA is moving to clips. Yeah. And so it's this weird construction. But in some ways, F1 is very set up for this already naturally, right? People don't really watch the whole sport as much as they want to watch clips, I'm guessing.

It's not that long. What are you trying to say? How long is this race on site? Are you trying to say how long it's boring? It's never boring, and it's not that long. I mean, that's the thing about it. But you guys also have a lot of data, like, you can feed that kind of anxious mind. And there's no breaks. It just goes.

I'm not sure if you have a point there, unfortunately. Pretty diplomatic. I was just trying to move the conversation. No, what I can say is that our sport has the highest engagement rates across all sports, even comparing to NBA and everything. But why is that?

I think there's just a huge hype at the moment and maybe yes, maybe, okay, maybe a little bit. It is fast pacing. There's incredible action scenes, like thrilling action. There's huge crashes. - Did you not want to get in the business? Given your knowledge and your experience, you didn't want to be in the, 'cause you now have transitioned into venture capital. How did you make that decision versus working in the business of Formula One?

Oh, great question. Because, yeah, that's a good question. So in Formula One, what jobs would have been left for me now after driving would be, for example, running a team. But running a team is 24/7. Like you need full commitment. You need to move to the UK. All the teams are in the UK. It's a full life dedication. And I've been, I've done that. Been there, done that. Now I want more freedom in my life to define my calendar and everything and be at home more.

And so that job, for example, would not be a possibility and not something I want to do. And then beyond that, yeah, you can be a driver manager, but even there you need full commitment. So tell us about this transition into tech and investing and venture. What was that journey and what attracted you to that?

I was always inspired by people like Elon Musk, who obviously you were talking about before, and those achievements that you have this idea and then you achieve something which has impacts like millions of lives. I just found that fascinating. So I always just wanted to pursue that path. So I started investing as an angel investor. Hold on a second. Take it easy. Angel investing. Wow.

What are you doing after the show? Did you ever read the book Angel? It's a phenomenal book. It's in 12 languages. I'll sign a copy for you. There's a book called Angel. It's 84 pages long. What were your first few deals? 11 Labs, for example. Good for you. Pretty good. Yeah, that's gone really well.

- How did you find that? How did that come about? - I mean, I'm really putting an effort into this community as well. I'm spending a lot of time in Silicon Valley, meeting everybody and also connecting to the European corporate landscape. So I'm bringing customers, revenues, connecting, building bridges.

Because there's a unique angle that I can bring, you know, thanks to my sports past. So I've just built my way into it and built a reputation. And then you start getting the opportunities. What themes, Nico, have you invested in that today you would not invest knowing what you know today?

Not the ones in the board. Yeah, that's the flying taxis, the Vittles, for example. Yeah, Germany was leading the way on those. You have Joby, for example, Joby Aviation, which is probably currently best positioned in the US. But Germany was leading the way with two planes.

two horses in the race and both of them have run into trouble. One is bankrupt, one was both bankrupt, I think. So that's something that then in hindsight, you of course, if you had read the book, you would have known hardware is hard. Right. I would have avoided that. I should have listened to you. You should have gotten that chapter. I should have listened to you. Get a highlighter out. Hardware is hard. Hardware is even harder now with the tariffs.

I'm hearing now, like I have a, I invested also in a cyber e-scooter here in New York called Infinite Machine. And now with the tariffs, because the supply chain is so concentrated in China, it's just, it's a complete mess. Yeah. Nico, what about the political landscape in Europe? There was a pretty important election in Germany. It seemed to kind of go down the middle.

What goes of Europe? What's happening in Europe? The investability of Europe, the ability to do business in Europe. What do European industrial businesses do? There's a ton of skill. There's a ton of cash. When you talk to those folks, what do you tell them? I know you are very, very bearish on Europe. You wouldn't put a dollar there, but is that correct?

Well, no, for sweaters and wine, he puts much more than a dollar. That's true. It's pretty prolific. It's a really good question. I actually think industrials... And yacht chargers, right? Yes. Industrials, I would.

Industrials, I think there's tremendous skill. Outside of industrials, I think it's hard. Yeah, so we have the problems with regulatory frameworks being way too cumbersome. We have the geographic fragmentation in Europe, which is very different to the US. Politically, it's really, I mean, quite in a bad place at the moment.

And so, yeah, I understand. But at the same time, as you said, talent density is insane. The universities are some of the best in the world. So that's where our hope is in the next generation that's coming now. Stick to the Nordics. And the Nordics are very powerful. Yes. But also Germany. I'm German. Yeah, a little bit. So there's a lot of hope still. Yeah. Hey, what's your daily driver?

Daily driver is a Porsche. A Porsche. And then when you're with your daughter, I don't know how old she is, but you ever like pull some tricks and like, is she like, hey, dad? No, she shouts, drive slowly, daddy. Really? I'm not allowed to drive fast with her, no. Terrified. Which is fine. Which is fine. You don't want her to get into the family business? No, no, no, no. What do you mean?

Okay. What are some investments that you're really excited by? Beyond 11 Labs, there would be Applied Intuition, another one. Oh, great business. Where I'm in. That's a really, really interesting company. It's a company that supplies software primarily to all the legacy car manufacturers that have not managed this transition to being software first, like Tesla has shown the way. And this startup... It's like scale AI for automotive in some ways, right?

for part of the business. - Yeah. - Yeah. - Nico, you're gonna fit right in. Have you learned to play poker yet? - I'm a good poker player. - You're a good poker player? - Yes. - We'll see you on Thursday. - Excuse me, hold on, Nico. - Now you've changed his interest. Give it up for Nico. - Great thing. Thanks for coming out.

Thanks to our new bestie Nico Rosberg for joining us in Miami for F1. And thanks to you the audience for tuning in. If you want to come to our next event, it's the all in summit in Los Angeles. Fourth year for all in summit, go to all in.com slash events to apply. A very special thanks to our new partner. Okay, x new money. Okay, x was the sponsor of the McLaren F1 team, which won the race in Miami. Thanks to Hyder and his team

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