How To Fix Capitalism
A closer look at Chamath Palihapitiya — the intense but visionary VC who ran growth at Facebook
- “One of the things I have known my entire life is that I have an innate capability for making money.” @chamath also likes poker, basketball, data, challenging perceptions of the venture industry. Which is feeling more and more like a mature industry, short on ideas.
- Palihapitiya is a quant at heart. Obsession with numbers impacts his perception of political and economic systems. “You can fix capitalism […] It is inherently numerical.” This statement assumes that capitalism is broken, but it seems to work quite well for most people. Discuss.
- Made his first billion dollars as Facebook’s pre-IPO VP of growth. Having seen him in action in an illuminating lecture on growth hacking, he was nothing less than prophetic. Now, he’s hacking venture capital by implanting a social conscience. Which implies that the industry at large is antisocial.
- Early-stage investing means old boy networks and gut-feel decisions. This disadvantages founders outside the SV bubble. Palihapitiya wants to change that and he has a track-record investing in different markets.
- Lack of risk appetite is holding humanity back — industries like education, healthcare, space are perceived as high-risk. Instead, money flows into sure bets, like e-commerce.
- Social Capital is not your average SV VC firm. It’s Capital-as-a-Service model automates early-stage investments and provides “unbanked” startups with access to capital. Something tells me CAAS is going to stick. This team is run by @StanfordAsh.
- @rayko is Social Capital’s Head Of Platform. His team’s “8-ball” tool allows entrepreneurs to analyse growth — and benchmark performance. Would like to hear more on how growth is standardised for comparison.
- Palihapitiya is opinionated about startups going pubic — or not, as tends to be the case. Reckons IPOs are expensive, inefficient processes that could/should/will be optimised, and that tech companies need to go public to compete for talent with big players. Wants to give startups a leg-up into public markets through a special-purpose acquisition company, or SPAC, which lowers costs and admin. It’s called Hedosophia (“pleasure” meets “wisdom” in Greek).
- Palihapitiya previously said that Social Capital is going to be more like a “bastard stepchild of Berkshire Hathaway and Blackstone and BlackRock” than a traditional YC. The new vehicle feels integral to that.
- Having ran growth at Facebook back in the day, he said recently, infamously, that social media is “ripping apart the social fabric of how society works”. He has since contextualised by pointing to the broader attention farming industry, but he hasn’t retracted. “I think we’re all slaves to this shit,” he says in the feature.
- Credits therapy and Buddhism for helping him cope. Lots of people do.
- Opinionated on culture at VC firms. After a wobbly start Social Capital now adopting a more experimental approach. Sounds like a kind of startup that invests in other startups. Pretty cool.
- By 2045, Palihapitiya wants to create 10 million (real) jobs through investments. Refreshing to see goal setting around wealth creation for others, not the firm itself.
- “I wanted to take a huge bet on myself. If we win, I win the most. But the reason I do that is because if we lose, I lose the most.” This I like. The VC world is split into two camps — those who have skin the game, and those who do not.
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