♪ emily: he's a modern-day silicon valley renegade. chamath palihapitiya is unafraid of breaking the conventional rules, vowing to take bigger risks, solve the bigger -- biggest problems, and make money big-time. from putting chips in our clothes to starting a university from scratch. he is best known for supercharging facebook from 50 million users to 750 million users. but the tech growth legend started on an unlikely path on

-- in a country gripped with civil war. joining me today, the incendiary investor and founder of the social capital partnership, chamath palihapitiya. thank you so much for joining us. how do you feel about that word "incendiary?" chamath: i love that word actually. it's like, at least people will remember you. emily: you were born in sri lanka. what was the state of the country at the time? chamath: i was born in 1976. the civil war broke out in the early 1980's. between the minority and majority. both my parents are buddhists. my dad was in the civil service. my mom was a nurse. my dad was able to insinuate himself to get posted to the sri lankan high commission in canada. i think we were six years old when myself, my sister, and my

parents immigrated. emily: how the war started then? chamath: the war has started. 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. but it did. emily: did you go from being well-off to almost nothing? chamath: we had nothing. my first job out of college, i made $55,000. i remember i showed that to my parents because they complained

when i took this job. i took a job in finance because i felt this -- i saw this number. i told them afterwards you have , to realize i remember what it was like. i know for a fact when i saw your joint tax return, the most amount of money they had made was $32,000 combined. emily: three kids? chamath: three kids, lived above a laundry mat. two bedroom apartment. they grinded it out. they did everything. they found a way to give us music lessons. how do you do that on $32,000? emily: your mother was a housekeeper. chamath: she was always trying to better her english to take equivalency exams to become a nurse. unfortunately, that never happened for her. she was able to become a nurse's aide. my dad struggled to find a job, working a photocopy store for a while. finally got a job as a civil servant. the best he could do was escape a difficult situation and try to 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. so, in terms of lore, i've paid my dues. i have lore. i have worked in three of the top five internet businesses created. i did not necessarily found them, but i was at the foot of all three of them. i just don't care what anybody thinks anymore. what troubles do i have? 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. emily: what is the myth of chamath palihapitiya, and what is the reality? the reality is i'm a

deeply insecure person who got extraordinarily lucky. more lucky than i deserve. who is trying very hard to leave a reasonably positive legacy so that i feel like i did the right things. 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. emily: were you like this when you were young? has this evolved? have you become more courageous? chamath: alcohol is a great truth serum. money is a great amplifier of courage. what do i have to be afraid of at this point? i have an obligation to do what i think is right, to help

people, and build some things that are interesting. and frankly, to make more money, because if i can make more money, i will have a better sense of what to do with it if i have it. i spent the last two months in a long, drawnout pitch battle to figure out if we could launch a $100 breast cancer test for the united states. what i wanted to do was basically subsidize the whole thing. it would have cost about $150 million to do this right. chamath: so you are saying with $150 million, you could create a $100 breast cancer test? chamath: i could bring it to the market and just pay for a lot of women to do it. my point is all of those things , are possible because money amplifies your ability to do this. emily: so as a kid when you did not have money. chamath: all i wanted to do was be rich. i obsessed about the forbes list. i thought it was the most important thing in the world. no context other than i hated to be poor. it just sucks to be poor. we did not have a car until i was 17 years old. that is what created this insecurity, i think. i remember for two or three , years, i would explicitly lie about where i lived. i think it was because i was

ashamed. emily: i know one start of that has a codename for you, there's a codename for you, charlie foxtrot, cf. which also stands for crazy effer. are you a crazy effer? chamath: yeah. ♪

emily: how did you end up in silicon valley? chamath: it was very accidental. when i graduated, i took a job in finance to relieve the immediate pressure i felt for my family. very quickly, i thought it was boring. my girlfriend at the time -- who is now my wife. had moved down here. that is how i came down here. i applied for a bunch of jobs. that's how it all started. emily: how did you get the job at facebook? chamath: i had known sean parker since the early 2000's. emily: he was president at that time? chamath: parker said that he was going to be in washington, d.c., where aol's offices were. i'll be with mark zuckerberg, do

you want to meet? we had a meeting and i thought this was super interesting. these guys are up to something. i did a deal with facebook. we integrated aim into the pages of facebook. in that process, that's how i got to meet zuck. emily: what was he like at that time? chamath: high potential, but still very young. emily: did you know? did you have a feeling that it was going to be huge? chamath: i don't think we knew until about mid-2008. the reason was, by mid-2008, 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, then it 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 -- people in because we wanted more of that psychological feedback. chamath: -- emily: 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? chamath: 99.95% was facebook and 50 basis points to me. in my job, i inherited an unbelievable leader who had an unbelievable vision. and i was lucky to have a group of people who wanted to tolerate me for 4 or 5 years. emily: i know for a fact that startups today are consciously looking for their chamath. i know one startup that has a codename for you, charlie foxtrot. it also stands for crazy effer. are you a crazy effer? chamath: yeah. emily: tell me something you did

that was crazy. chamath: when it was time to internationally, the typical thing that people would do, you go and talk to google, yahoo!, ebay and ask how they expanded internationally. it was always the same answer. we take some lilywhite mba and they go out on an expat package. i was like, eff that. so, we went and hired in brazil, only brazilians. prerequisite, they should not be able to speak english very well. we would do this in all these markets. for example, in russia, we were approached -- we didn't do this. i thought about it. you can buy a list from a russian hacking group with every single person's name in russian. and for a while, i was like wow. 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

-- a dark profile. we didn't do it. i want to be clear. the point is you have to be able to figure out where is that line. kind of go a few steps back the -- kind of go a few steps past the line. emily: what are facebook's biggest challenges today? chamath: 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, and adulation. the acolytes come out of every single part of the woodwork. oh, my god, you are -- it takes a really, really special person to not be able to be affected by that. emily: google and facebook are trying to do a lot of the same things. who wins? chamath: i think they both win,

but in different ways. i think what happens is that google wins with respect to the entry point. they own the front door to the internet, and they own the front door to 90% of the mobile apps. -- mobile web. facebook owns the experience once you're there. emily: speaking of another big company that you're not fond of, you once wrote that tim cook has created a milquetoast, say nothing, uninspiring, margin image -- margin tweaker for himself. you also said that apple should bypass tesla and make elon musk the ceo. do you still believe that? chamath: yes. emily: why? chamath: i think that he is very good at what he does. i think he is probably an exceptional operationally minded ceo. the question is can that inspire -- cannot type of person -- can that type of person inspire the creative types to build the next lily pad? my intuition on this is, no. you go to a company like apple, death marching to a million

-- trillion- dollar market cap. 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, communal work environment, i'm not sure greatness comes from those boundary conditions. emily: can apple get there if they have a new leader? chamath: i think they can acquire. emily: like? chamath: tesla is a good one to me. 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 built your house, they would sell more houses than anybody in the world. emily: how much longevity do they have? chamath: they have a lot of longevity. the question is, should be -- we

be looking at them to be the next great thing, or should we be looking at them to just be the next great company? if there was any way we could wind back the clock, that's the one thing i wish would have never happened. ♪

emily: what is the social capital partnership? where did the idea come from? chamath: it manifests itself today as a venture fund, but i started it with a larger ambition and hopefully, a much , more important mission than just investing and generating returns. basically what i saw 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. that we had never seen before. the third major trend was just things were getting democratized at an unbelievably rapid pace. if i had to take 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 then and still today will disproportionately affect health care, educational, and financial services. and that's when the likable when lightbulb went off. and i was like, wait a minute. those things matter. then i was thinking this is it. we need to create a platform that, over the next 20 to 30 years, can rewrite the rules of those things in a way where we can affect outcomes for people. and i am like, that is my life's mission. that will feel like i did everything i was supposed to. emily: you do have social in the name. chamath: social comes from society. i want to help society. i want to build things for people. emily: some people would say you have had big exits from yammer, tinder. aren't those world-changing, society-changing companies? chamath: 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. and so things like tinder allow -- and yammer allow me to do chronic heart failure, diabetes, asthma, copd, breast cancer starting a university for kids. ,emily: how is social capital different from andreessen horowitz? chamath: phase one is the same thing. and i think phase two is completely different. emily: what phase are you in? chamath: we are building the brain trust. emily: you're giving people the chamath secrets? they don't necessarily have to hire a chamath? chamath: it is hard to find these people. emily: chamath in a box. chamath: as we become successful, our goal is to have a pool of capital to reframe

how many of these broken things should work. and that is the end game. emily: a few years ago, 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? chamath: i took a lot away from that. that was really -- if there was anyway where we could wind back the clock and that wouldn't have happened 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. emily: do you wish you didn't say it? chamath: no, but i wish we did not have to deal with it in a public record. emily: were bridges burned there? chamath: not bridges burned. but it's like -- well, probably, yes. it was a crappy thing all the way around. emily: this is my question. you had a problem with how they were taking money off the table. is silicon valley ethical? is silicon valley loyal?

chamath: i think it's deeply moral and ethically gray. emily: what do you mean by gray? chamath: i think we are in an ecosystem that is extremely naïve. in that it's not 100 years old. ,there aren't defined ways of doing things. we are inventing things every day. and in things that are new, people are going to try a bunch of different things. some things will work, some things won't. i don't think anyone here is acting criminal. that's what i'm saying. people are deeply moral. people care to do the right thing. emily: silicon valley 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. chamath: no. my companies are for-profit companies. that's not their job. their job is to educate people. their job is to manage diabetes. emily: you are personally invested in this fund? chamath: i'm the largest

investor in my own fund. emily: how much? chamath: $120 million. and counting. emily: you mentioned that peter thiel encouraged you to buy into it. do you think you can beat the returns of other vc funds? or the absolute distributions? chamath: we are obliterating the market. 30 points of alpha above the nasdaq. the private side vehicles are roughly the same. i mean, it is really good. we are involved in probably $10 billion to $15 billion unicorn companies in meaningful ways. emily: i want to know about your poker hobby. you don't just enjoy poker, you are in the world series of poker. chamath: it would be great if one day we were able to film this. there are about 20 extremely successful businessmen. we play regularly in an unbelievable game in l.a. since then, i started my own version of that here. emily: who is the best poker player in silicon valley?

chamath: if i had to name, i could name a couple who i think are exceptional. david sachs, ceo of yammer. dave goldberg. my wife. she is a really, really good player. i have been on a two-year downturn. i've lost for two straight years. emily: you and your wife have been together since before you were very, very rich. how do you manage that transition? you have kids. chamath: we live the same. we've made a decision that we are giving it all away. emily: how do you want to be remembered? chamath: i would like 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. emily: chamath palihapitiya, thank you for joining us today on "studio 1.0." chamath: thanks.

♪

betty: 2014 was a year of personal risk and professional reward for music legend sting. sting: nothing of value is ever devoid of risk. betty: from lead singer to solo artist and this year, producer of a multimillion dollar show on broadway. why sting is telling his story on the great white way and what the rock god thinks of today's biggest music stars. vanity has to do with his legacy. all on this edition of "encore." i look at you and you have this amazing career. but thfo