Nick Shalek predicts every asset will eventually be tokenized, making the world legible and programmable to machines and agents.
Shalek argues horizontal SaaS is now replicable, so Ribbit backs physical-world moats like Base Power's virtual power plant.
Ribbit Capital runs concentrated funds with 10-12 core positions, backing regulated-industry rebels like Coinbase, Robinhood, and Stripe.
Ribbit's Shalek says AI makes physical moats valuable
Nick Shalek of Ribbit Capital argues that AI will accelerate the trends of the past twenty years rather than replace them, chiefly the compute build-out and the growing value of proprietary data. Because horizontal software is now easy to replicate, the durable businesses are those where software amplifies a physical or data moat, such as Base Power's distributed batteries. He extends the same logic to tokenization, which he expects to make every asset legible and programmable to machines and agents.
Takeaways
AI accelerates twenty years of existing trends. Shalek says he does not know how AI will develop, and doubts anyone who claims certainty. He expects the same forces of the past two decades to accelerate, chiefly the compute build-out and the growing value of proprietary data.
Horizontal software moats are eroding fast. Tools like Claude Code let anyone rebuild horizontal SaaS, so Shalek looks for businesses where software amplifies another moat. He points to physical-world companies in energy, defense, quantum and robotics, and to Base Power's battery network.
Tokenization makes the world programmable to machines. The term means different things to different people. Ribbit's conclusion is that tokenization prepares the world to be legible and programmable to machines and agents, which lowers costs and widens access for global investors.
One-person billion-dollar companies are close. When Ribbit started, building sophisticated software took tens of millions of dollars and specialised teams. Now one person can build and ship it in a couple of weeks, and Shalek thinks the first billion-dollar one-person company is not far off.
Ribbit runs small, concentrated funds. The firm keeps ten to twelve core positions and makes six to eight new investments a year, built on concentration and conviction. It still holds companies from its first two funds, attending board meetings and buying more stock.
Ribbit backs rebels in regulated markets. Founded in 2012 with Micky Malka, the firm set out to back rebellious founders building the biggest companies in complex regulated spaces. He argues sector funds do not work in venture, since the opportunity moves from place to place.
Shalek's path to Ribbit Capital
Yale, where a class taught by David Swensen and Dean Takahashi led to a job at the Yale Investment Office. The lessons were that liquidity has a price and that investing is ultimately about people.
General Catalyst in Boston, working with David Fialkow on an Iceland data center company meant to export the country's stranded energy. He calls that market a thousand times less interesting than today's.
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On this episode 2
Show 1
Ten weeks at Facebook working on payments and Facebook Credits, an early attempt at building a global payment network.
Stanford business school brought him west. A friend introduced him to Micky Malka, each told the other's idea would not work, and Malka recruited him into a fund instead.