Chamath Palihapitiya, Founder and CEO of Social Capital | Square One with Romeen Sheth

Key Takeaways

  • Inclusion Maximization – Humanity will be better off by giving everyone the same starting point and letting life play out
    • Chamath truly believes his success came from the luck factor associated with the butterfly effect
    • Our societal systems need to give everyone a chance, people tend to seize the moment if given a fair opportunity
  • “Venture capital properly deployed can solve the biggest problems, filling the void of the shrinking scientific ambitions of government, foundations and international organizations” – Chamath Palihapitiya
    • We have diluted the empowerment of great research due to random political exercise around citations and institutional bureaucracy
    • The government would be better off subsidizing entrepreneurs and allowing them to appropriately allocate towards innovation
  • “You have to play your own game if you’re going to win. Your life is the only game you can change the rules. Every time you want to win, you can just change the rules.” – Chamath Palihapitiya
  • Check in with yourself often. Make sure you have a consistent view of yourself, regardless of the variability in the world around you that so often begs for comparison.

Intro

  • Chamath Palihapitiya (@chamath) is the Founder and CEO of the venture firm, Social Capital. Also known for being an early senior executive at Facebook, a minority owner of the Golden State Warriors, and co-host of the All-In Podcast. Chamath and Romeen discuss everything including technology, venture capital, inclusion maximization, and playing by your own rules.
  • Check out more Podcast Notes with Chamath Palihapitiya
  • Host: Romeen Sheth (@RomeenSheth)

Technologies Impact on Society

  • “What can and is possible with tech will become manifest destiny” – Chamath Palihapitiya
    • Pros: Technology moves faster now than ever and has the ability to truly change the systematic structure, like what bitcoin is doing to the financial institutions
    • Cons: Technology has exposed us to the entire length of the distribution of outcomes a human can experience
      • The expansion of awareness accelerates insecurity and the feelings of ‘haves and have nots’
  • We have a new modern technological toolkit to define value in the world but we are still using an old framework
    • With internet accessibility and vast amounts of free educational content, anyone can gain appropriate skills for economic emancipation
    • But our societal framework still juxtaposes value, the school you went to or where you are from still are inappropriately defined in the value equation

Political Spectrum

  • The political spectrum is not a line, it is a circle
    • The characteristics of either party are similar in the fact they are moral absolutists
      • Mimetic Theory – we are born a clean slate and we copy the people around us, which naturally causes conflict
        • Two toddlers in a room full of toys, often fight over the same toy
    • People are willing to be authoritarian on behalf of their beliefs, which is dangerous from a historical perspective
      • Hitler started as socialist – extreme left and extreme right is often hard to distinguish

Venture Capital

  • “Venture capital properly deployed can solve the biggest problems, filling the void of the shrinking scientific ambitions of government, foundations and international organizations” – Chamath Palihapitiya
    • We have diluted the empowerment of great research due to random political exercise around citations and institutional bureaucracy
      • Nobel Prize winners are typically awarded in their 70’s for work they did in their 20’s and 30’s
    • Superconductors have some of the best potential to change the world and only 3 labs in the US are working on them with budgets under $30m a year combined
      • The government would be better off subsidizing entrepreneurs and allowing them to appropriately allocate towards innovation
  • “I’m in the business of never going out of business” – Chamath Palihapitiya
    • Chamath is building an economic engine that he is constantly cycling capital through and reallocating
      • Public capital markets are effective because of their advantageous scale, liquidity, and legal guardrails

Play By Your Own Rules

  • “You have to play your own game if you’re going to win. Your life is the only game you can change the rules, every time you want to win, you can just change the rules” – Chamath Palihapitiya
    • Financial institutions in the public and private markets have a job to be done that is safe based on their risk and resources, if you understand their job, the arbitrage is to be the opposite
    • You won’t win playing the same game as the financial institutions, play by your own rules
  • Open up your phone and open your stock tracking app, how many stocks do you track?
    • Romeen deleted all his stock apps because he felt his mind was getting rewired to short-term thinking by checking so frequently
      • “I looked for narratives to justify those daily moves, I become detached from reality” – Romeen Sheth
    • This can work in the short term, but you’re playing someone else’s games, don’t break your own rules
      • Excessive information can be tilting

Teaching is an Investment in America

  • Teachers should be experts in their subject and paid accordingly, like athletes in Chamath’s opinion
    • As a parent, you want your child to get the best education possible. Our current education system is not set up to attract talent capable of providing that.
    • The amount of GDP and human potential that compounding knowledge can unlock is incredible
    • Policy and governance get in the way of creating an efficient market
      • More choice and charter schools could be a solution

Inclusion Maximization

  • Inclusion Maximization – humanity will be better off by giving everyone the same starting point and letting life play out
    • Chamath truly believes his success came from the luck factor associated with the butterfly effect
      • He is sensitive to the idea that it could have been anyone else, those folks are no worse than Chamath and he is no better than them
      • Evening the starting line is what motivates Chamath
  • Example: Ivy League schools have become more and more of a legacy admission system rather than merit-based
    • This system exposes the exclusion of opportunity in our society
    • This is a system issue of classism above all, the upper class wants to sustain their societal standing by putting a stranglehold on the accessible opportunity

Perspective

  • To gain a unique perspective, you must define behavioral principles that protect you from the worst parts of your personal psychology
  • Check in with yourself often. Make sure you have a consistent view of yourself, regardless of the variability in the world around you that so often begs for comparison.
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Notes By Drew Waterstreet

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