Meet Facebook's Most Successful Alum

Social Capital’s Chamath is one of the most outspoken investors in Silicon Valley.  Last week he joined us in Product Hunt LIVE, with the brief introduction, “Hard questions only.” Love it. Here are some of the highlights, written by the Product Hunt team.

Chamath Palihapitiya has had a fascinating journey to where he is today. After moving to Canada from Sri Lanka at the age of six and years later graduating college, he became the youngest VP in AOL’s history, serving as head of the instant messaging division back in 2004. He was only 26 years of age. From there, Chamath joined Facebook one year after the company was started, where he is credited with leading the growth effort towards the massive user base it has today.

By 2011, he left his job at Facebook and started his own fund, Social Capital, which invests in industries that frequently get neglected by other VCs, such as health and education. As of 2015, the fund had more than $1.1 billion in total assets and is one of the most ambitious (and highest performing) tech investors out there today. Oh, and did we mention that in 2011, he became a co-owner of the Golden State Warriors? The NBA Championship and winning record this season has done him well.

Chamath recently joined Product Hunt for a LIVE Chat and shared some of his thoughts on transforming industries, growing Facebook, innovating healthcare and education, and more. Read on for his insight—it’s sure to make you think about the future of our world differently.

What are a few opportunities that excite you in old industries (government, insurance, etc.)??—?Kingsong Chen

If I had to rank some areas that are both incredibly difficult and meaningful, I’d come up with the following rough rank:

1. Climate change
2. Energy density
3. Transportation
4. Agriculture

Some more color:

On (1) we have crossed the rubicon on climate. There is no longer an opportunity to roll back the damage we’ve done by many accounts, but rather, minimize the damage. As such, I think it becomes critical for us to figure out what things we can do to help improve climate (i.e. genetically engineering trees to absorb carbon, as an example).

On (2) we need to fundamentally bend the current laws of energy density, as we don’t really have a deep understanding of new materials science or how we’d construct batteries and other forms of energy storage on a different price curve.

On (3) we need to eliminate the vagaries of driving on roads and think about transport as not just (x,y) but also (x,y,z). In this case, it would, specifically mean vertical take off and landing of consumer transportation devices.

On (4) we won’t have enough food to feed the entire population today. Rather than focus on how to monopolize key inputs like water (which some very smart and rich people are doing), I’d like us to figure out how to dramatically improve yield.

How do you help the startups you invest in battle bureaucracy when trying to transform industries??—?Panashe Mahachi

This is a really important question. There are two kinds of growth: rocket ship growth → monotonically negative growth thereafter OR steady compounding. Transforming laggard industries will require an appreciation that the latter approach is the only path to success, so being capital efficient and eliminating distractions from the rest of the Silicon Valley echo chamber are crucial. There is too much focus in Silicon Valley on trying to recreate the magic of Facebook or Snapchat’s rapid growth. I don’t think these are replicable. The other kind of growth takes more discipline to appreciate, is more reliable over time, and allows the building of durable companies.

With Facebook’s recent announcements at F8, and incredible platform growth over the last 3–5 months, how would you have led the growth differently if you were still at Facebook??—?Nik Sharma

I think Facebook’s strategy is solid, but could use a few doses of broadened scope. Specifically, the most tactical improvement to the strategy would be viewing the user across a continuum of 24 hours. What I mean by this is that Facebook is essentially a proxy for every internet user now. This said, their scope and scale are still bounded to the 2–4 hours per day that these internet users are at “play.” I think broadening the scope to think about the user across their entire lifecycle per 24h day would drive another set of interesting, strategic bets at scale. How do you provide utility at work? How do you provide utility at sleep? How do you provide utility more broadly defined (while driving, at the doctors office, applying for a credit card etc.)?

In the meantime, there are some big, bold bets that can happen within their current scope. I’d seriously be thinking about buying a big game studio, buying a video service like Netflix, and bidding more aggressively for live content—starting with sports.

Is an iOS and Android duopoly good enough? Will there be a third significant smartphone OS in the next 5–10 years??—?Michael Lipman

I’m still convinced that the cloud is the ultimate threat to both iOS and Android. Over time, if you have equivalence in the products across both platforms and that both of them enable light client experiences married to powerful cloud experiences, the next platform is really just a browser (ultra fast) on a “phone” with a really fast internet connection that gets you to these cloud services you rely on.

How do you balance work and family life??—?Thomas St?cklein

I don’t try to balance it. Rather, it’s pretty interwoven. Some weekends, I work. Some weekdays, I blow off [work] to hang out with my kids. I take larges stretches of time off when I can. I work large stretches of time when I have to. I try to focus on the quality of my interactions at both home and work, and whether I am having enough of those in semi-regular intervals. I am also fortunate, however, in that I am in a position to give this answer. This isn’t true for a lot of people, and as such, I wouldn’t want to offer this as some kind of path for others.

What compelled you to purchase a stake in the Golden State Warriors, and why were they a better fit for you relative to other teams??—?Charles Kunene

I was originally trying to buy the Sacramento Kings and potentially move them to Seattle. This didn’t come to pass, and after a trip to NYC meeting with then commissioner, David Stern, my friend Phil Hellmuth invited me to watch the NCAA tournament at Joe Lacobs house. He had recently purchased the team and was looking for another major investor who could invest at least $25M and would join the board. So I did. It has turned out to be a huge success, to say the least, but I’m really glad i did it because: a) I wouldn’t have been able to focus on this had I been the lead buyer of the Kings and B) it turned out to be much more fun to be part of an ownership group in your home town so you can just drive to games.

Why isn’t more being done to innovate on education within the home (parenting)??—?Hope Atina

I think there is a lot going on to improve the state of education. This said, I also think that because we haven’t yet seen a major financial outcome in startup education, the funding cycle is still stunted relative to what it can and should be. As such, the innovations are slow and infrequent. With a few more visible wins, education will attract the same caliber of entrepreneur that other areas with measurable upside have and then the cycle of innovation will accelerate.

With respect to what is happening in the home, I am not sure that this is the right answer. This is a symptom of the real problem, in my opinion. If we need a lot of at home parenting involvement, then we need to question the quality of what’s happening for 10 hours each day at the school and in the classroom.

In my case, anecdotally, my parents had no time to help (nor could they, to be honest, because of their educational level) during my primary/middle/high school years in Canada. This said, the system was very good and reliable, so they didn’t really have to. If we assume that there can and should be a lot of parental involvement, I think it actually speaks to a breakdown of quality and capability of the school, which should be fixed in some other way.

It seems that the future of healthcare is preventative medicine. How can we start encouraging family members and the rest of society to start giving a shit about their health??—?Shane Stewart

I think your answer is in your question. When I think about one of the biggest things I should have done better, it was to be more knowledgeable about diabetes and then push my dad to get his diabetes under control. He ultimately passed away because of a cardiac arrest brought on as a complication of diabetes. As a result, however, I am now pretty vigilant about my A1C and glucose levels in general. The generalization of this is that as we democratize medicine by creating simple tools and services that allow people to understand their bodies in more detail, we can also engineer the right amount of social pressure by including their loved ones in this process.

Even when you are not invested in managing your chronic disease, your employer, provider, payer, or loved ones can be. This isn’t well handled today and many people, faced with the daunting task of managing what is the equivalent of a death sentence, give up and let themselves decay. But when there are pools of people who are helping along the way, the evidence is that disease states improve meaningfully. I suspect that as this happens at the “bottom of the funnel,” those same people helping a loved one probably take care of themselves a bit better as well, and then the “top of the funnel” can also slowly improve.

Do you see your value as being a value-add investor (i.e you’d invest in startups that other similar caliber VCs would, but you’ll be more beneficial for the startups), or rather, in investing in startups that other VCs wouldn’t? If the latter case, what do you believe that other VCs don’t that causes this difference??—?Imran Ghory

Whether you go through an incubator or a traditional VC, the biggest question that I see founders abdicate is “Why should I listen to you?”. At the end of the day, there are a lot of people: a) playing startup, b) playing investor, and c) playing experienced operator. It’s important that we don’t end up in a huge case of “the blind leading the blind.” I see that a lot. People who have never built anything successful or done anything meaningful passing along advice as if it’s gospel, only to be followed blindly by young founders who assume that these people know what they are talking about.

Prosecuting not just the style or reputation of the source, but also the experience base, is crucial.

“Why is this person credible when they give me advice?” I wish more people would ask this question before deciding who to work with.

What are some experiences/insights/skills you learned during your time at Facebook that you’re applying to your work at Social Capital today??—?Thomas St?cklein

Here is a short list:

1. Don’t take your self too seriously.
2. Live your truth (be yourself and live authentically).
3. Appreciate that 99% of this is pure luck and it could be some other schmuck who got lucky.
4. Do the right thing even when it’s the hard or unpopular thing.
5. See #1.
   

Check out the full LIVE Chat conversation with Chamath on Product Hunt,and you can learn more about his early years and incredible time at Facebook by listening to this recent episode of the Recode Decode Podcast with Kara Swisher.