VC Corner: Chamath Palihapitiya of Social Capital (Wealthfront, Treehouse, Yammer)

Startup Grind featured Chamath Palihapitiya, Founder and CEO at Social+Capital, as one of the last guests of 2015. An investment arm and incubator for healthcare, mobile, finance, education, and enterprise software companies, Social+Capital aims to "Earn like Berkshire-Hathaway and invest like the Red Cross."

Before becoming an investor, Chamath was a long-time member on the Facebook executive team. His early background includes being a leader at AIM+ICQ, Winamp, and the Mayfield Fund. He’s also the director and owner of the NBA Golden State Warriors. Born in Sri Lanka and raised in Canada, he holds an engineering degree.

He calls himself a CEO to remind himself that he’s building a company. Making tremendous wealth is a fortunate part of it, but there are also many byproducts when done correctly. He notes that Facebook is doing something in the same vein as are other big businesses like Microsoft -- but the big difference is how much money is being handled, which requires him to be very deft. Investing is his key to doing this, and hopes to be owning and investing in more businesses in the next few years. Allocating resources to solve major problems is the equation that works for him.

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What is Social Capital?

We asked Chamath about Social Capital. Here's what he said:

We are not building a venture fund - at least that’s now what I want to build - and I don’t really have any attachment to the role of CEO, but I do think I set the vision of a place, culture, and values of where we work.

If you ask me what we are today: we are in this primordial stage where we look like a venture firm. We take a lot of capital - ours and other people’s - and invest it in businesses. But I think what we are really doing is building this tool kit with interesting companies spanning a bunch of industries I think are important for us, and for the world.

What I would like for us to evolve into is something that looks more like Berkshire Hathaway and the Peace Corp, with this idea that you make exorbitant amounts of profit by making really smart bets on things that are important. You allocate those resources against the most important issues of the day.

I think the single most interesting business opportunity in the world is to find a way to create equity out of inequity. I think we are underestimating is the amount of pent up frustration that exists in the bulk of the population, where you don’t have as much equity as you thought. I think that boils over in unpredictable ways. I want to spend the next 30 or 40 years on that problem.

Chamath Palihapitiya on Doing What You Love

He quipped with saying that he doesn’t “like” investing, but he finds it interesting. Instead, he likes building products and investing is a manifestation of that. “Great companies build themselves,” he says. Adoption is created with momentum from passion, so why waste time building services like these? He re-created the Facebook growth team, which became very leveraged with just four people.

He thinks of himself as a type of coach, and prioritizes actually “doing something” instead of getting pandering into the picture. “Here’s what we did: Let’s appreciate whether this is good or not.”

Most of the time, the companies he works with will show him something like a user-generated model that’s worthwhile in some regard. Find out more about his approaches now!