>> he's a modern-day silicon valley renegade. chamath palihapitiya is unafraid of breaking the conventional rules of engagement, vowing to take bigger risks, solve the biggest problems, and make money big-time. from putting chips in our clothes to starting a university. he is best known for supercharging facebook from 50 million users to 750 million users. joining me today, the incendiary investor and founder of the

social capital partnership, chamath palihapitiya. thank you for joining us. how do you feel about that word "incendiary?" >> obviously people will remember you. >> you were born in sri lanka. >> i was born in 1976. the civil war broke out in the early 1980's. both my parents are buddhists. my mom was a nurse. my dad was able to insinuate lankan high commission in canada. we were six years old when

myself, my sister, and my parents immigrated. my dad proudly talks about how he was a communist organizer. when he spoke out about that, there was a huge pushback from the government that said you can't talk like this. there was a lot of pressure on my father to the point where he could not reasonably return to sri lanka without our life not being in some kind of jeopardy, so we filed for refugee status. the canadian government gave us refugee status, and we stayed, and life as we knew it abruptly stopped and we had to start all over again. no house, no clothes, no nothing. fast forward, i'm sitting here with you. it is crazy. it's not supposed to turn out this way. >> did you go from being well-off to almost nothing? >> my first job, i made $55,000. i showed that to my parents because they complained when i

took this job. i took a job in finance because i saw this number. i told them that you have to realize i remember what it was like. i remember for a fact when i saw your joint tax return, the most amount of money they had made was $32,000 combined. >> three kids? >> three kids, lived above a laundry mat. they grinded it out. they did everything. they found way to give us music lessons. how do you do that on $32,000? >> your mother was a housekeeper. >> she was always trying to better her english to take equivalency exams to become a nurse. that never happened for her. she was able to become a nurse's aide. my dad was able to find a job and work in a photocopy store for for a while. the best he could do was set an example and hopefully the kids will learn and do the same

thing. that is my motivation to say what is on my mind. the reality is -- silicon valley trades on two things, right? one is lore, and the other success. in terms of lore, i've paid my dues. i have worked in three of the top five internet businesses created. i was at the foot of all three of them. i just don't care what anybody thinks anymore. i have no troubles. i'm relatively healthy, knock on wood. financially secure. so why aren't i saying what i believe? my dad had nothing. he stood up and he was able to say this war shouldn't happen. >> what is the myth of chamath palihapitiya, and what is the reality? >> i got more lucky than i deserve.

i am trying hard to leave a reasonably positive legacy so that i feel like i did the right thing. i feel like there are way more people that are way more talented than me. i think the myth is that i'm aloof, arrogant. i say what's on my mind. i guess at some level maybe all of those things are true, but the "me" that i know is just the same guy that feels like my parents gave up a lot. i feel like i should be really doing something important. >> were you like this when you're young? has this evolved? >> alcohol is a great truth serum. money is a great amplifier of courage. what else do i have to be afraid of at this point? i have an obligation to do what i need to do, to help people, and build some things that are interesting.

frankly, to make more money, because if i can make more money, i will have a better sense of what i have to do. i spent the last two months in a long, drawnout battle to figure out if we could launch a $100 breast cancer test for the united states. i wanted to subsidize the whole thing. it would have cost about $150 million to do this right. >> with $150 million, you could create a $100 breast cancer test? >> all of those things are possible because money amplifies your ability to do this. >> when you didn't have money -- >> i just obssessed about the forbes list. i thought it was the most important thing in the world. no context other than i hated to be poor. we did not have a car until i was 17 years old. for two or three years, i would explicitly lie about where i lived.

i think it was because i was ashamed. >> there's a codename for you, charlie foxtrot, cf. it also stands for crazy effer. ♪

>> how did you end up in silicon valley? when i graduated, i took a job in finance to relieve the immediate pressure i felt on my family. very quickly, i thought it was boring. my girlfriend at the time had moved down here. that is how i came down here. i applied for a bunch of jobs. that's how it all started. >> how did you get the job at facebook? >> i had known sean parker. >> he was president at that time? >> he said that he was going to be in washington, d.c. do you want to meet?

we had a meeting and i thought this was super interesting. these guys are onto something. i did a deal with facebook. in that process, that's how i got to meet them. >> what was he like at that time? >> high potential, but still very young. >> did you know? did you have a feeling that it was going to be huge? >> i don't think we knew until about mid-2008. then we could say to ourselves, there is a formula here. by formula i mean that we understood the psychology of why people wanted to be a part of this. once you understand the psychology, that is just a matter of building features and software that bring that psychology to life. people loved this emotional and responsiveness that facebook could give them.

the formula was to figure out how these early behaviors could then drive the ability for you and me to pull other people, and we wanted more of that psychological feedback. >> you are legendary when it comes to growing facebook. what did you do? how did you do it? how much of it was you and how much of it was facebook? >> 99.95% was facebook and 50 basis points to me. i inherited an unbelievable leader who had an unbelievable vision. i was lucky to have a group of people who wanted to tolerate me for 4-5 years. >> i know for a fact that startups today are consciously looking for their chamath. there is one startup that has a codename for you, charlie

cf it also stands for crazy effer. are you a crazy effer? >> yeah. you go to talk to google, yahoo!, ebay and ask how they expanded internationally. they go out on a package. i was like, eff that. in russia, i thought about it. you can buy a list from a russian hacking group with every single persons name in russian. i thought we should just buy this list of every single person's name and we will run google ads so that when they

search for themselves, they see links to a fake profile. we didn't do it. the point is you have to be able to figure out where is that line. >> what are facebook's biggest challenges today? >> it is the challenge of any successful company. the internal inability to disrupt yourself. think about what happens in a company, not just facebook, google, apple. extreme wealth creation. all of the distraction that creates. extreme amounts of incremental focus, attention, press, adulation. the acolytes come out of every single part of the woodwork. it takes a really, really special person to not be able to be affected by that. >> google and facebook are trying to do the same thing. who wins? >> i think they both win, but in different ways.

google wins with respect to the entry point. they own the front door to the internet, and they own the front door to the 90% of the mobile apps. facebook owns the experience once you're there. >> speaking of another big company that you're not fond of, you once wrote that tim cook has created a milquetoast, uninspiring, margin tweaking image for himself. you also said that apple should by tesla and make elon musk the ceo. do you still believe that? >> yes. he is very good at what he does. i think he is probably an exceptional operationally minded ceo. the question is can that inspire the type of creative types to build the next lily pad? i think, no.

think of the amount of wealth that is created in a place like that. think of what that means for that individual engineer who has the next great idea. if you're trying to build the next great thing, where the person at the top is not necessarily optimized for thinking that way and being as maybe as disruptive, and rather wants to create a holistic environment, i'm not sure greatness comes from those boundary conditions. >> can't apple get there if they have a new leader? >> they can acquire it's a multitrillion dollar category. it is something we would all love, an apple experience in our car. there are many other areas, home automation. if apple build houses, they would sell more houses than anybody in the world. >> how much longevity do they have?

>> they have a lot of longevity. if there was any way we could wind back the clock, that's the one thing i wish would have never happened. ♪ >> what is the social capital

partnership? >> i started it with a larger ambition. hopefully, a much more important mission than just investing and generating returns. in 2011, when i was leaving facebook, i saw three massive trends. the first was that everything was moving to mobile. the second was there was a massive amount of regulatory change. the third was that things were getting democratized at a rapid pace. if i took those three trends and apply them to markets, where i

thought they would be most disruptive, what would they be? those three trends in my opinion will disproportionally affect health care, educational, and financial services. those things matter. then i was thinking this is it. we need to create a platform that over the next 20-30 years can rewrite the rules of those things in a way where we can affect outcomes for people. that is my life's mission. that will feel like i did everything i was supposed to. >> you do have social in the name. >> social comes from society. i want to help society. i want to build things for people. >> people have said that you have big exits from companies. are those world changing companies? >> when we find people that are doing their own version of things that will create value,

we get behind those guys in a big way. things like tinder allow me to do breast cancer, c.o.p., starting a university for kids. >> how is social capital different from andreasen horvitz? >> phase one, phase two. >> what phase are you in? you are giving them the chamath secrets? >> it is hard to find these people. we give it to them in the box. >> chamath in a box. >> our goal is to have a pool of capital to reframe these things.

>> you called out airbnb's founders for taking money off the table and not giving employees an opportunity. what did you take away from that? >> i took a lot away from that. if there is any way where we could wind back the clock, that's the one thing i wish would never have happened. it wasn't fair to the team. it wasn't fair to me. i said what i said. i wanted them to hear what i said. that's all i wanted. >> do you wish you didn't say it? >> no, but i wish we did not have to deal with it in a public way. >> were bridges burned there? >> no bridges burned. well, probably, yes. it's a bad thing all the way around. >> this is my question. you had a problem with how they were taking money off the table.

is silicon valley ethical? is it moral? >> i think it's deeply ethical and morally gray. it's not 100 years old. there aren't defined ways of doing things. we are inventing things every day. people are going to try a bunch of different things. some things will work, some things won't. no one is acting criminal. they are deeply moral. people care to do the right thing. >> the tech community is being blamed for the rising inequality. you don't require your companies to donate 1% of their time equity to philanthropy. >> that's not their job. their job is to educate people. >> you are personally invested in this fund? >> i am personally the largest

investor. >> how much? >> $120 million. >> do you think you can beat the returns of other vc funds? >> we are obliterating the market. 30 points of alpha above the nasdaq. we are involved in $10 billion, $15 billion unicorn companies in meaningful ways. >> i want to know about your poker hobby. >> it would be great if one day we were able to film this. there are 20 extremely successful businessmen. we play regularly in an unbelievable game in los

angeles. since then, i started my own version of that here. >> who is the best poker player in silicon valley? >> david sachs, dave goldberg, my wife. i have been on a two-year downturn. i've lost for two straight years. >> you and your wife have been together before you were very, very rich. how do you manage that transition? >> we've made a decision that we are giving it all away. >> how do you want to be remembered? >> i want to be a person who people say generally did what he felt was the right thing, lived a life that was morally true to his beliefs, and in a small way, paid off the debt to his parents. >> chamath palihapitiya thank you for joining us today on studio 1.0. >> thank you.

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