♪ emily: 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 from scratch. he is, perhaps, best known for supercharging facebook from 50 million users to 750 million users. but tech's growth legend started on an unlikely path in a country gripped by civil war. joining me today on "studio 1.0," the incendiary investor

and founder of the social capital partnership, chamath palihapitiya. thank you so much for joining us. chamath: thanks for having me. emily: how do you feel about that word "incendiary?" chamath: i love that word actually. it's like, at least people will remember you. good or bad. emily: i want to start at the beginning, because your story is so fascinating. you were born in sri lanka. what was the state of the country at that time? chamath: i was born in 1976. i think the civil war broke out in the early 1980's. between the tamil hindu minority and the ethnic sinhalese buddhist majority. both my parents are sinhalese buddhists. my dad was in the civil service. my mom was a nurse. my dad was able to kind of insinuate himself to get posted to the canadian high commission, the sort of sri lankan high commission in canada. i think we were six years old when myself, my sister, and my parents immigrated. emily: so had the war started then? chamath: the war had started. my dad proudly talks about how he was a sort of communist organizer. when he spoke out about that,

there was a huge pushback, pushback from the government that said you can't talk like this. so there was a lot of pressure on my father, to a point where we could not reasonably return to sri lanka without his or our life not being in some sort of jeopardy, so we filed for refugee status. the canadian government, out of the goodness of their heart, gave us refugee status, and then we stayed, and literally life as we knew it just abruptly stopped, and we had to start all over again. no house, no clothes, no nothing. and fast forward, i'm sitting here with you. so, it's pretty -- it is crazy. it's probably not supposed to turn out this way. but it did. emily: did you go from being well-off to having almost nothing? chamath: nothing. we had nothing. we grew up on welfare until i was 18. 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.

but i took a job in finance because i felt this -- i saw this number. and i told them afterwards, you have to realize, like, i remember what it was like. i know for a fact that when i saw your joint tax return, the most amount of money that they had made was $32,000. combined. emily: three kids? chamath: three kids in a two-bedroom, 400 square foot apartment, lived above a laundromat. and they grinded it out. they did everything. they put us in good schools. they found a way to give us music lessons. i mean, how do you do that on $32,000? emily: your mother was a housekeeper, right? chamath: my mom was a housekeeper, initially. my mom was always trying to better her english so that she could take the equivalency exams to become a nurse. unfortunately, that never happened for her. but she was able to become a nurse's aide. my dad struggled to find a job, worked at a photocopy store for a while. then finally got a job as a civil servant. well, the best he could do was escape a really difficult situation and try to set a good example and then, you know, hopefully these kids will learn,

and they'll do the same thing. that is, sort of, a lot of my motivation to say what is on my mind. you know, the reality is i have -- you know, silicon valley, it trades on two things, right? one is lore, and the other is success. so, in terms of lore, i've paid my dues. i have lore. i have worked in three of, like, the top five internet businesses ever created. i did not necessarily found them, but i was at the foot of all three of them. and so i just don't care what anybody thinks anymore. i mean, 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 that this war shouldn't happen. emily: what is the myth of chamath palihapitiya, and what is the reality? chamath: the reality is i'm a deeply insecure person who got extraordinarily lucky. more lucky than i deserved.

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 i'm aloof, i can be 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 with it. emily: were you like this when you were young? has this evolved? chamath: it's definitely evolved. emily: have you become more courageous? chamath: what is that phrase, like, alcohol is a great truth serum. money is a great amplifier of courage. like i said, what do i have to be afraid of at this point? i have an obligation now to do what i think is right, to help people, and to build some things that i think are interesting. and frankly, to make more money, because i feel like if i can

make more money, i will have a better sense of what to do with it if i have it. i just spent the last two months in this drawn-out, long, drawn-out pitch battle to try 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 $100 million to $150 million to really do this right. emily: so you are saying for $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 only 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 would obsess about the forbes list. i knew every single person on there. i thought it was the most interesting and important thing in the world. no context for anything other than i hated to being poor. it just sucks to be poor. we did not even have a car until i was 17 years old. that is what i think created this insecurity. i remember, for two or three years, i would explicitly lie about where i lived. and i think it was because i was

ashamed. emily: i know one start-up 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 this job in finance, mostly to kind of relieve this immediate pressure i felt for my family. but very quickly, i was like, man, this is so boring. and then, 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. and i got a job at winamp. 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, and basically, parker and -- emily: he was president at that time? chamath: he was president at the time. parker pinged me and said, hey, i'm going to be in d.c., virginia, where aol's offices

were, with mark zuckerberg, do you want to meet? and we had a meeting and i was like, wow, this is super interesting. these guys are up to something. and so i did a deal with facebook. where we integrated aim into the pages of facebook. and in that process, it'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 it was going to be huge? chamath: i don't think we knew until about 2008, mid-2008. the reason was, by mid-2008, we could say to ourselves, hey, there is a formula here. and by formula what i mean is 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. so the formula was to figure out how these early behaviors could then drive the ability for you and me to pull other people in because we wanted more of that psychological feedback. 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: i think it was like, you know, 99.95% facebook and like 50 basis points 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, you know, 4 or 5 years. emily: i know for a fact that start-ups, today, are consciously looking for their chamath. i know one start-up that has a codename for you. charlie foxtrot, cf, which also stands for crazy effer. are you a crazy effer? chamath: yeah. [laughter] chamath: yeah. yeah. emily: tell me something you did

that was crazy. chamath: when it was time to expand internationally, the typical thing that people would do is you'd go and talk to google, yahoo!, ebay. "hey, how did you guys expand internationally?" it was always the same answer. we'll take some lily-white mba and they go out on an expat package. i was like, eff that. so, we went and we hired all -- we said, ok, in brazil, only brazilians. prerequisite, they should not be able to speak english very well. we would do that in all these markets. for example, in russia, at one point we said, we were approached -- we didn't do this. i thought about it. you can buy a list from, like, a russian hacking group with, like, 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 were going to run google ads so that when they search for themselves, they'd see a link to a dark profile. not even a profile that existed

on facebook, a fake profile. we didn't do it. i want to be clear. but the point is you have to be able to figure out, like, where is that line. and then kind of go a few steps past the line. emily: what are facebook's biggest challenges today? chamath: i think it is the challenges of any really successful company, which is the internal inability to disrupt yourself. think about practically what happens in a company, not just facebook -- facebook, google, apple. extreme wealth creation. all of the distraction that then that creates. extreme amounts of incremental focus, attention, press, adulation. the acolytes come out of every single part of the woodwork. oh, my god, you are -- it takes a really, 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. so 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 web. and facebook owns the experience once you're there. emily: speaking of another big company that you're not so fond of, you once wrote, "tim cook has created a milquetoast, say-nothing, uninspiring, margin tweaker image for himself." [laughter] you also said that apple should buy tesla and make elon musk the ceo. do you still believe that? chamath: yeah. emily: why? chamath: i think that he is very good at what he does. i think he is probably an exceptional operationally minded ceo. it's just the question is can that person inspire the creative types to find or build the next lily pad? my intuition on this is, no. you go to a company like apple, you know, death marching to a trillion dollar market cap. think of the amount of wealth

that is created in a place like that. but then 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, you know, disruptive, and rather wants to create a holistic, communal work environment, i'm just not sure greatness comes from those boundary conditions. emily: can apple only get there if they have a new leader? chamath: no, no, i think they can acquire. emily: like? chamath: tesla is an obvious one to me, because it's a multi-trillion dollar category. it is something where, i think, we would all love, you know, an apple experience in our car. and there are many other areas, home automation i think us another obvious one. like if apple built your house, i bet you they would sell more houses than anybody in the world. emily: how much longevity does apple have? chamath: they have a lot of longevity. so really the question is, should we be looking at them to expect them to do the next great thing, or should we look at them to now just behave like every other company?

chamath: if there was any way where we could completely wind back the clock, that's the one thing i wish would have never happened. ♪

emily: what is the social capital partnership? where did this idea come from? chamath: it manifests itself today as a venture fund, but i started it with a much larger ambition and, hopefully, a much more important mission than just investing and generating return. basically what i saw in 2011, when i was leaving facebook, were three massive trends. the first was 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 would

be most disruptive, what would they be? and those three trends, in my opinion then and still today, will disproportionately affect health care, education, and financial services. and that's when the lightbulb went off. i'm like, wait a minute. those things matter. and then i was like, oh, my gosh, 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 mission. that will feel like i did everything i was supposed to. emily: well, you do have social in the name. does that change things? chamath: social comes from society. i want to help society. i want to build things for people. emily: so, some people would say you have had big exits from yammer, tinder. are those world-changing, society-changing companies? chamath: when we find opportunities to back incredible people who 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 and things like yammer allow me to do chronic heart failure, diabetes, asthma, copd, breast cancer, starting a university for kids. emily: how is social capital any different from andreessen horowitz? chamath: phase one, step one, it is the same bloody thing. and i think phase two, it is completely different. emily: what phase are we in? chamath: we are in phase one, step two. now, we're starting to build what we call the brain trust. you want to grow? talk to ray. you want to understand the formula? talk to jonathan. emily: so you're giving people the chamath secrets? they don't necessarily have to hire a chamath? chamath: it is hard to find these people, and so we give it to them in a box. emily: chamath in a box. chamath: yeah, as a service. [laughter] chamath: it's really growth as a service. so as we become successful, our goal is to just take that money and harvest it back so we have a pool of capital that we will use to basically 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 other employees the same 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 completely wind back the clock and that would have happened, that's the one thing that i wish had never happened. it wasn't fair to brian and the team. it wasn't fair to me. i said what i said. and i wanted them to hear what i said. and 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 the public record. emily: were bridges burned there? chamath: not bridges burned. but it's like -- well, i don't know, probably, yes. it's just a crappy thing all the way around. emily: so 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 silicon valley is deeply moral, and i think it's ethically gray. emily: what do you mean by gray? chamath: i think we are in an ecosystem that is extremely naive. 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 here. i think there's a real -- people care to try 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 in philanthropy. chamath: no. my companies are for-profit companies. that's not their job. their job is to manage diabetes. their job is to educate people.

emily: and you are personally invested in the 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 standard distributions? chamath: we are absolutely obliterating the market. we're probably, like -- well, the public side vehicle is probably, like, 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're not -- you don't just enjoy poker, you are in the world series of poker. chamath: it would be great if one day we would ever be able to film this. but there's about 20 extremely successful businessmen. we play regularly in an unbelievable game in l.a. and 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 sacks, ceo of yammer. in my home game. dave goldberg, ceo of surveymonkey, also my home game. my wife, brigette lau. she is a really, really good player. i have been on a two-year down streak. i've lost for two years straight in this game. 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. it's like -- honestly, like we've made a decision, we are giving it all away. emily: how do you want to be remembered? chamath: i would like to be a person that hopefully people say generally did what he felt was the right thing, and then 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 so much for joining us today on "studio 1.0." chamath: thanks. ♪

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