Founders Fund’s outlier bet on humanely killed fish

Of course, the fund’s headline-grabbing recent win has nothing to do with fish. Its early and aggressive bets on Elon Musk’s SpaceX — a relationship that traces back to Peter Thiel and Musk’s shared history at PayPal — are reported to have generated tens of billions of dollars for the firm, by some accounts the largest venture outcome ever recorded. Asparouhov argued that win has accelerated a broader shift in venture toward hardware and physical-world businesses, noting that most of the largest companies on the Nasdaq today involve complex electromechanical systems rather than pure software. He predicted more of SpaceX’s alumni, flush with liquidity and shaped by working alongside Musk, will go on to start their own ambitious physical-world companies.

Whether Shinkei becomes one of the firm’s next big wins will take time to know. The company is a robotics manufacturer and a seafood processor and a consumer brand, all running at once, and each layer has its own daunting challenges. Fishermen are used to working a certain way. Distributors are built around decades-old habits. Chefs and grocery buyers still have to be convinced that a story about humane fish slaughter is worth paying more for. The hardware has to survive saltwater, fish guts, and life on a commercial boat, and the product it’s selling spoils, so there’s little room for the kind of stumble a software company can usually shrug off.

Still, talking with the two together in El Segundo was enough to make me understand why Founders Fund finds the bet compelling. The firm thinks it has found a founder building something novel in a surprisingly dysfunctional industry — the kind of company almost nobody else in the United States even wants to build.