Chamath Palihapitiya, Founder and CEO Social Capital, on Money as an Instrument of Change

Intro (00:00:00)

• The speaker talks about being open about being a generous tipper because it gives permission for others to be honest.
• Growing up in a dysfunctional household on welfare made the speaker question the importance of money.
• Money is seen as something that can be used to empower oneself and do the things they want.
• The speaker enjoys tipping generously at restaurants and seeing the transformation it brings to the workers.
• They find joy in anonymously giving generous tips and see it as a gift they have the ability to give.

Chamaths upbringing (00:03:20)

• The speaker's parents craved money because they needed it since the speaker's dad was unemployed and their mom was the sole breadwinner.
• The speaker used to work at Burger King to help support their family, and initially felt ashamed about it.
• They eventually accepted their situation and stopped feeling ashamed.
• The speaker later got a job at a telecommunications startup in Ottawa where they learned from the business's billionaire owner, Terry Matthews.
• Terry Matthews viewed money as an instrument of change and was dynamic in his businesses and views.
• The speaker also learned from another billionaire, Michael Copeland, who manifested money differently.
• The speaker aspires to be like Terry Matthews and wants to use money as a means to do cool things in the world.
• They emphasize the importance of observing and copying high-functioning people.

Money as an instrument of change (00:09:53)

• The speaker believes that about 150 people run the world and control important assets and money flows.
• They want to break through and be at the table with those who control the world.
• By proving that they can do what the current powerful individuals do, but better, the speaker believes they can open the door for others to do the same.
• Their goal is to aggregate enough capital to allocate it based on their worldview.
• They emphasize that there are many other powerful individuals with their own worldview who don't care about what others think.
• The speaker believes that anyone can strive for power and influence, including themselves.

Social Capitals 50year goals (00:11:58)

• Chamath Palihapitiya's ambition for Social Capital is to employ at least ten million people, positively affect a quarter of the world's population, and make about a trillion dollars by 2045.
• Building businesses that can achieve these goals requires a technological approach and thinking about long-term sustainability.
• The success of these goals depends on patience, resolve, and intellectual perseverance.
• Building businesses for lasting impact requires doubling down when things get hard and taking a long-term perspective.

Fail fast and learn mentality (00:17:55)

• The fail fast and learn mentality works for consumer internet businesses that are focused on exploiting psychology and gaining quick user adoption.
• However, it does not work for solving important issues such as diabetes, cancer, or education.
• Solving big problems requires a methodical and patient approach.
• The real value and gains will come from tackling difficult problems that have not received much attention, rather than investing in superficial and short-term endeavors.

Soulsearching in social media (00:21:22)

• Chamath Palihapitiya expresses guilt and believes that the tools created by social media are tearing apart the social fabric of society.
• The short-term, dopamine-driven feedback loops in social media are destroying civil discourse, cooperation, and promoting misinformation.
• Palihapitiya encourages future leaders to recognize the importance of this issue and to consider stepping away from these tools.
• He personally does not use social media and highlights instances where social media platforms have been used to manipulate people and cause harm.

Taking personal responsibility (00:25:29)

• Personal responsibility includes taking control over capital and using it for structural changes that can be controlled.
• Avoid being programmed by being aware of how behaviors are influenced.
• Focus on areas such as diabetes, education, and climate change.
• Soul searching is necessary to determine what one is willing to do and give up.
• The most educated and intelligent individuals are often the most susceptible to being manipulated.
• Intellectual independence should be preserved and not compromised.

Immigration (00:26:45)

• Get the money and then use it to create new rules and make a difference.
• Money is a driving force in the world and economic incentives influence behavior.
• Those with capital and a point of view should push their worldview.
• Diversity of views leads to a more balanced and fair system.
• Having a unique worldview is irrelevant without capital, but powerful with it.
• Capitalism is not just an economic system but also a philosophy that encourages voting for change based on views.
• Look at successful people like the Koch brothers who have propagated their worldview through capital and influence.
• There is a need for a counterweight to opposing views in order to have a more balanced representation in the world.
• Get the money without losing one's moral compass.

Venture Capital (00:31:07)

• Venture capital is seen as a poor allocator of capital and tends to be risk-averse.
• Venture capitalists prioritize protecting their own interests rather than driving progressive change.
• To improve the allocation of capital, a more systematic and data-driven approach is needed.
• VCs should remove biases and be open to global opportunities instead of having strict rules or limitations.

I want the money (00:39:36)

• The speaker acknowledges that his pursuit of money and influence motivates his actions.
• He wants to win and will play the game to achieve his goals.
• He recognizes that others may not share the same level of passion and may prioritize financial returns.

How do you keep that power (00:40:40)

• The speaker admits to becoming isolated due to his focus on his own ambitions.
• He is unsure how to prevent his power from corrupting him but wants to stay true to his values.
• Staying grounded and remembering his humble beginnings helps him maintain his integrity.

What's your plan to run this public fund?

• The speaker wants to reshape the psychology of society and bring liquidity into companies sooner.
• Bringing liquidity sooner allows companies to bake longer and more patiently.
• The goal is to incentivize employees to stay at a company for a longer period of time.
• Liquidity can help solve the problem of high attrition rates in Silicon Valley companies.

How do you make tough decisions?

• The speaker acknowledges that decision-making is a challenge for their organization.
• They regret making purely monetary decisions without considering the rate of return.
• It is difficult to strike a balance between mission-driven decisions and purely monetary decisions.
• The speaker doesn't have a clear answer for when to keep going and when to give up.

Do MBA students have a disadvantage in getting capital?

• The speaker previously expressed a bias against MBA students in getting capital for entrepreneurship.
• They now believe that it doesn't necessarily matter if you have an MBA or not.
• There are ways to determine value and success that are independent of traditional signals.
• Changing your mind and being open to new perspectives is powerful in business.