Social Capital CEO?Chamath Palihapitiya - Recode Decode podcast interview with Kara Swisher and Teddy Schleif?

After a speech at Stanford University in late 2017, Chamath Palihapitiya says he realized that something in his life needed to change.“In Italian, there’s a beautiful word, basta, which is basically like your way of saying, ‘Enough!’” the Social Capital CEO said on the latest episode of Recode Decode. But he dismissed the idea that he as a venture capitalist carried an outsized responsibility to others as “idiotic” and said that his right to be happy trumped all else.And his message to those who claim to be upset with him?“To all the people that worked for me and whose money I took, you’re fucking welcome,” he said. And that’s the organization I set out to build.KS: And you had a relatively traditional venture capital firm to start with, right? And in all of the things that I look at, I’m actually relatively proud, except that one, and that’s the one that has millions of views and it’s the one where I said, “Social media is ripping apart the fabric of society,” all of which is relatively true. They were the things that other people would also value, whether it’s a job title, a promotion, working at one company over another, the money you make, the trips you take, the experiences you have, because they’re all relatable to other people. And in fact, I think that I’ve actually really bastardized some core relationships in my life where I’ve created hyper-transactional relationships in many areas of my life.KS: That’s a good way of putting it.And I don’t think that’s what I wanted. That’s what we do.KS: Right. I’m flying around the world to the Middle East, to China, to all these places, not for my own validation and happiness, but to get the validation of other people who then don’t make me happy even when they do validate me.” In Italian, there’s a beautiful word, basta, which is basically like your way of saying, “Enough!” And so I woke up one day and I was like, “Basta!” Enough. I can’t take that, ethically speaking.” But that was a crazy dinner, and I remember walking away thinking, “What the fuck is going on with Chamath?” Yeah.KS: Because it was manic, actually, I would call it. TS: Isn’t that one of the challenges here, though, that part of being a venture capitalist, and maybe as the firm becomes effectively a family office, you guys are doing different things, but isn’t one of the challenges that ...I don’t like the term family office, because I don’t think that’s what it is. One of the challenges when you already have an existing infrastructure like a firm is then, when you want to change things, it can be pretty dramatic.KS: How did you feel about that? KS: So when you say ...And by the way, I have that right. KS: No, I’m not saying you don’t, obviously. You’re telling me all of a sudden you should legislate who cannot quit their jobs?KS: Nonetheless, it created ...It’s idiotic, what you’re saying. People would always say, “Chamath, you’re candid.” And then candor would transition to, “Oh, you’re pretty authentic.” But what I realized is, those are still very superficial, and the ability to be really authentic and emotionally present with somebody is super hard. Now, one of the things I’m thinking about when you’re talking like this, is that ... I’m actually more present in it and as a result I’m actually just happier because I’m more grounded in my values, OK?KS: There’s an old saying, if you don’t feel the pain, you’re not going to feel anything else. Yeah, I think that’s a really good saying. I think a lot of people are very repressed and they live in this halcyon days here of just like, “It’s great. But the point is that I think people in Silicon Valley, in this point in time, are the most unhappy they’ve ever been personally. It’s all of these things that conflate to just making people really feel empty. I think that a lot of people play the kabuki theater, the charade, of a startup, but if you’re just so preoccupied with your own happiness there’s a general malaise that you bring into the office. KS: I wonder why it happened first, before ...Well, I think it’s because you have a lot of really really young people who grew up in front of phones who are completely disconnected from their real, tactile lives. I mean honestly, Teddy, tell the truth.TS: Do I think people in my generation are unhappy? You can take the same health care stat and one person will say, “My gosh, we’re all doomed,” and the other person says, “Look at the advancements that we have had, and thank god that this is happening.”Company-building today, I think, needs people who are generally happy because I think it allows you ... KS: Yeah.Now, it’s like all this pristine gleam and shine, and it’s all packaged to look like something that should be in a movie. But underneath, to a lot of people it’s just a charade and a nightmare.TS: You think the wrong types of people are coming to Silicon Valley these days?No, no, no. KS: Right.Take a step back and just ask yourself honestly, “Do you not think this stuff impacts your psyche and your definition of yourself, your core happiness? I tend to think if it happened to me, it’s going to happen to the rest of you.KS: What is in place that creates that? I think the thing that’s accelerating all of this is we haven’t really done a good job yet of creating a new generation of heroes that show a set of values and choices that are worthwhile. KS: Right.And then I thought, “But these are all good people, how did they end up just so detached and broken?”KS: Tinder.I think that there’s an entire suite of experiences, a whole suite of them that are combining in unforeseen ways to just rewrite the norms of society. Now, if I said, “Well, there’s all of this information that I’m consuming that has positive and negative impacts on my mind, still not clearly well understood, so I’m going to prophylactically do something to help manage my mental health,” you sound like a crazy person.KS: Right.That’s the tragedy of what, Teddy, your generation, and Kara, your kids and my kids are going to feel head-on.KS: What about the business of here? Because right now Silicon Valley has gotten a lot of pushback on a lot of the things it’s made, as you know. You’re saying the same thing.Look, I think that people would be crazy to say that, for example, like Google hasn’t advanced humanity by 10 to 100x. I don’t think anybody really does or understands the implications of ...KS: So you feel the negative impact is overestimated?I think that the thing that has happened is that there has been a transition from achieving a mission to optimizing a business model and maximizing a business model.KS: Right, and advertising. Then the team is like, the employees are like, “Should we be sad now that nobody wants our things?” “No. Because we’re going to charge more for those things, and now you’re going to count those things, and those things are called money!”It’s always a game of hot potato around motivation and morale. I’ll tell you two-fold.KS: This was naturally the way that it was going to happen, is what you’re saying.Yeah. Well, it is a little bit because they said they weren’t like that.It’s not.KS: I know, but you know there was a whole ...And you believed them?KS: They believed them. I think we’ve realized that it’s a much bigger thing than we thought it was. Because they have just taken in so much toxic garbage into their body.KS: They’ve also spewed it out, Chamath.Yeah, but they don’t know how to deal with it, and so they compartmentalize and they tuck it in, and I think it destroys men bottoms-up at a very cellular level. If you think about the progress that we’ve made, Civil Rights, medicine, politics, all the things that have happened were fueled in part by money that was created out of a capitalist system. You can’t have one without the other.And all of a sudden we have a counterfactual and say, “We would have been the same.” It’s disingenuousness, but the reason why people get so angry is because, a, they don’t like what they are, nor do they like what anybody is that they see. I think step one would be to really fix who one is and try to make oneself a little bit happier around the things that they care about.KS: I think she’s talking about inequality, which has never been great. You’re missing her completely.No, I don’t think so.KS: I think you’re all terrified of someone who is actually ...I’m not.KS: Talking about something that’s important, which is the enormous inequality of wealth and opportunity in this country.I’m not actually scared of her at all. I think a lot of it is tapping into a lot of latent anger.KS: No. I think she’s saying, “Enough,” is what she’s doing. She’s saying “that’s enough of that.”TS: Basta.KS: That’s enough of the #MeToo. It’s enough of this. Enough.I’m not trying to take away from that.KS: No, but I’m saying ...When I think about 70 percent taxes or like the Green New Deal ...KS: That’s not what she’s talking...Like a non-binding thing ...KS: It’s the beginning of a conversation. I will not do that.” It has to start with those kinds of things.I think we’re saying the same thing then.KS: Well, I guess.It starts from a more angry point, Kara, and then you chill the fuck out.KS: Yes, but you have to, you have to get angry.Guess what? And I bet you I’ll be a lot more effective.KS: Let me just tell you the strides that gay people had started with silence = death. You’re getting so offended by the fact that ...KS: Because you’re attacking someone who I think is talking about critical issues in our society.I’m not attacking it. TS: She’s also 29 at this point, so I mean it’s possible there’s a generational thing. KS: Right.We’re doing the same thing. I’ve never seen people who like, happily, are like, “It would be nice to do this.” I think it’s more like, “Oh, I don’t like that. KS: So, hard to become successful.Kara, it’s hard to even grow.KS: Right.It creates a really dangerous, precarious startup culture which is not one of “innovation wins” but one where the person who can get tricked for the most money will survive, and then a lot of the really good ideas won’t get capitalized because they’re too risky. Yeah.KS: Can we hug and stuff like that?Yeah.TS: I’ll tweet you. At this point, basically, I think there’s an element of truth to this, for sure, but talk about where ...KS: He sort of believes it. I want to raise a $300 million fund.” You eventually find somebody else and then you’re like, “I’m going to raise a billion dollar fund.” So what has really happened? When you go and raise money, ask your GP when you get multiple term sheets, “How much of the fund is GP capital?” KS: Almost none.And you’re going to be shocked.TS: Is it 1 or 2 percent on most funds?Yeah. Or the Knight Foundation, they have to pay their programs and then they’re going to look around and say, “Okay, well, sell this other portfolio.” So when it hits venture, it’s going to hit it that way. It loses money.”TS: So at that point then, when Kara says lets raise her next fund, or you raise your next fund, or I’m raising my next fund, suddenly the LP doesn’t have as much cash to put in.Yeah, and so that’s why. Which is why you wake up every day and you see 50 deals a day and you think, “Where is all this money coming from?” KS: There aren’t 50 good ideas.This is the Ponzi scheme that we are living in.KS: So, how do you get to the good ideas? And I try to ask myself, “What is super hard about this?” And it takes a while because some things are non-obvious because when somebody presents you something it’s like, “Oh, I built this thing and here’s how it behaves.” You’re like, “Well, that’s pretty straightforward.” But you’ve got to find the hard thing. So, for example, I just saw Free Solo.KS: Yeah, I’ve heard it’s great.TS: It’s good.So, that’s an enormous outcome because it’s the product of a hard thing and this initial courage threshold. I think that every time I look at a company now, I first look in only those four categories because I’m deeply infatuated ...TS: Anything that’s nonprofit right now?Huh?TS: Anything that’s the four categories?No, no, I’m ... So, I like to take those two ideas and apply it to those five markets and see if there’s things that I like.KS: Are you just investing alone now? I have like 25-30 people that help me.KS: Really?Yeah. those are the worst.KS: I have a benevolent dictatorship, as you know.TS: Constitutional reform right there.KS: I love a benevolent dictatorship, as you know.Now it’s more of a thing where what I would love to do is do what sort of Buffett and Munger have done. I mean, honestly ...KS: He did eat seven lamb chops during our sitting.TS: This in Omaha?KS: We had a good time.I remember this lunch we had and he didn’t eat because he was just talking. So you’ll see better and more companies get built outside of the Valley.KS: A lot of people have left recently. A lot of people, you’re right, they leave.They’re unhappy, Kara. KS: Interesting.TS: What would you tell an entrepreneur out there who right now is like ...KS: “What, Chamath?!”TS: No, no, no. I think it’s compartmentalize these things in a way so that you put them in context. I grew up in an alcoholic family and the book is called The Adult Children of Alcoholics by Joan Woititz.KS: Oh, great book.It was fucking transformational in my life because it basically disarmed all of my dysfunction and said, “Chamath, you’re like everybody else.” It made me feel so understood and seen for the first time in my life. So, there are either books or therapy or all this stuff that I think is just so profoundly helpful to people to disarm the things that right now they feel are exacerbated when they’re online, and that then will result in a much emotionally healthier and well-balanced person capable of being an incredibly productive founder.TS: Because to some extent these are founders that are unhappy and think they’re alone and unhappy, right? no one talks about it.KS: Or they don’t express it.TS: They don’t express it, right.KS: They don’t have the access to express it, so they don’t feel it.I think they express it. It’s just that we’re not doing a good job of actually looking at these things and actually putting it all together into a mosaic. Like fucking Vegas and LA and it was nuts.KS: I’m telling you, that dinner I came back. It can be really kind of intoxicating to see it, touch it.KS: Michael Cohen talked about it yesterday.But it’s not, it just leaves the person in it, I think, or it left me completely broken and unhappy.KS: Well, can Silicon Valley change? Disarming it and then giving people a better, simple toolkit, and I think there are simple things that can work for a lot of people to make them feel like they’re not alone and that they’re seen and they’re understood. KS: All right, well, it’s a lot about self-reflection, right? Happiness.KS: The other day I was talking to some Silicon Valley people. I’m like, “It’s a miracle any of you can see in the mirror because you don’t have any self-reflection.”The best thing that ever happened to me through all of this is my kids looked at me and they said, “Dad, you are so much nicer.” If you had talked to my friends, they would have said, “You know, he can be crazy from time to time, but he really shows up as a dad.” So, I always thought that I was really doing a good job not being my dad to my kids.