Direct Feedback

So many people shy away from direct feedback. You try to sugarcoat stuff, because the culture we live in is, “Come along, get along.” Let’s paste everything over with pleasantries, make everybody feel good, everybody gets a star. Participation is more important than the actual accomplishment. We’re veering to a culture of inclusiveness that’s gone to an extreme, no longer recognizing and celebrating as much the actual achievement.

https://www.youtube.com/watch?v=VHslS0QPMSc (16:20)


Diversity needs to be more broadly defined. People think, “Oh, let’s just have some more people of color and everything is gonna work out.” I don’t think that’s what diversity means.

Diversity means you have a really interesting complexion of experiences. One way to solve for experiences is gender and race. Another way to solve for experience is roles and how you grew up, those types of things.

Both are really important. What you really want to do is create intellectual conflict.

https://www.youtube.com/watch?v=HYCM_Hkrfvs (20:13)


Who cares about diversity? I think it’s kind of stupid, the whole term is stupid. I think what’s not stupid is this idea that you very inherently believe that all people are roughly equal and that you inherently believe that, independent of your economic situation, you may have actually a really good idea so it can’t just be rich people deciding for everybody else. And that you believe that there are things that are worth working on that span, not just the most obvious money making things, but things that are nascent today that could become really important in the future. That’s what I mean: there’s a diverse way of thinking, it’s an eclecticism in how you surround yourself, it’s an open-mindedness to different experiences.

So, it’s not a checkbox, you can’t have a person with the rule, it’s just how you have to live. You know, in Waterloo the biggest thing that I lacked the most was any of that. I had maybe two or three electives. My entire time here. It’s limiting, because there’s just so much of the world that I just didn’t understand. I would not have said that I was an open-minded as I am today. And by having gone to San Francisco, which probably is the most extreme form of open-mindedness possible, I was forced to confront a lot of the biases that I’ve had. And what I realize is now, the people that I surround myself with today are so different than the people that I surrounded myself with earlier on and I’m so much better for it.

So there has to be mechanisms where, at a very young age, you push yourself out of your comfort zone. I remember in Waterloo, there were all these Indian people and all they would do is hang out with each other.

I just found it so stupid. If I wanted that, my parents should never have left Sri Lanka. I could have been as happy as — what was the point? I remember when Brigette and I first started dating it was just so uncommon because you have this Asian, and a South Asian. And now it’s much more common. You just have to force yourself into states of discomfort so you can expose these boundary conditions. Otherwise you are just emotionally and intellectually stunted. And I think you’re never going to achieve your potential that way.

https://www.youtube.com/watch?v=TlIyhYALSLA (9:20)


The two [mistakes] that I see the most is the difference between short-term greedy and long-term greedy. So, if you’re short-term greedy, you’re going to be cheap with equity. I’ve never seen anybody build a successful company not giving away a lot of equity.

You’re much better off owning a smaller piece of a massive thing, ask Mark Zuckerberg, than all of a small thing. There are many examples of both that validate this is true.

Understanding and innately believing in this idea of being long-term greedy and giving away a lot of equity is the most important and leveraged thing you can do.

What’s great about that is that you give yourself a chance to be really right. Because if you get a really great hire right, then the thing you’re thinking is, “Wow, I’m so glad I gave this person this equity, they really deserve it.”

And that has massive implications on long-term retention of that person.

The other thing is, if they’re not working out, it’s not fatalistic because you generally have a one-year cliff.

The second thing, correlated to the first thing, is to take the hiring seriously. Really figure out whether these people are aligned. Spend the amount of time to do backdoor references and make sure that these people are great.

It’s shocking how transparent people want to be, which is why it’s even more shocking when we don’t take advantage of that and don’t call people.

https://www.youtube.com/watch?v=HYCM_Hkrfvs (53:13)

Root Out Poor Behavior Decisively

I think that there’s a couple things. One is like, this first wave of the obvious stuff, I mean, this is a terrible way to describe it, but low-hanging fruit of sexual harassment, maybe we’ve dealt with that. Here’s what’s much more insidious — It’s all of the conscious and unconscious bias. It’s all the little snide remarks, it’s all the ways people are included and excluded.

That’s the stuff that’s super corrosive, and so how do you overcome that? Well, one is you have to have people that give a shit and when you see it, you root it out fast. And you act decisively. It does not matter how important that person is, how they’ve behaved in the past, how much money they’ve made you, you put them on ice and you put them on a path to get better or you kick them out. Period, end of story. No. 1.

No. 2 is then on the other side of that, you have to have a support infrastructure that creates a different way of giving these people an outlet so that they feel supported. So for example, there are so many great people in YPO, but there’s so many great people who don’t believe that’s a great fit for them, right? So do we need other forms of that? Absolutely. Should they be by definition more inclusive? Absolutely. Should they include people that are not necessarily CEOs so you get a more inclusive group? Absolutely. These are obvious things, right?

And so if you have that, you have the mechanism now to actually support people, and then you have a mechanism to teach people. Separately, when you find these small edge cases, it’s just so easy to let it go. The way that somebody says something, the way that somebody does something, and we all do it. And the question is, can we all now become a little bit more empathetic and say, “You know what? We’re all gonna find ourselves where against something or somebody or some group of people, we all have and carry a latent bias.”

Well, somebody else thoughtfully can say, “Listen, just FYI, blah blah blah,” and then you learn, and then in the same way you repay that favor, in a way that’s non-threatening.

https://www.recode.net/2017/8/28/16212318/venture-capital-chamath-palihapitiya-social-capital-investing-vc-kara-swisher-recode-decode-podcast (34:55)


I’ve always equated what I call alignment to a tree. Alignment in a company is like rings of a tree. So if you cut down a huge redwood, what you notice is there’s many thousands of rings, and that pretty much embodies how a company works, which is we’re at the center. You have the founders and the core 100 or 200 zealots and they are 100% aligned. When you think about that original group at Google, what a master class of technical, just I mean — Unbelievable. Facebook, same situation. Unbelievable.

But then as you hire more and more people, you basically have less and less aligned people. Then that thousandth ring, which is your 75,000th employee, they’re at best 10% or 20% aligned. What that speaks to is the fact that you just have really a very difficult way of having operational control over values and culture at scale. That’s really what it speaks to.

And so, you start things. For example, the 20 percent time, what’s probably for Georges Harik, who, if anybody knows, is an absolute genius. He is a superstar of superstars.

It probably was like where Georges was like, “You know, one day a week I’m gonna code this other thing,” that also changed the world for Google. But, by the 75,000th employee, 20% time is kinda like, “Oh, you know, I’m gonna write memos. I’m gonna build …”

So I think there’s a decay that just naturally happens in organizations, and it just takes a very special kind of discipline and focus to want to fix it. And I think that’s what it really speaks to in the Valley, which is that at the end of the day once these businesses become commercial enterprises, they’re like every other business. They effectively do decay, which is what causes them to eventually be decayed.

https://www.recode.net/2017/8/28/16212318/venture-capital-chamath-palihapitiya-social-capital-investing-vc-kara-swisher-recode-decode-podcast (38:50)

Silicon Valley

Coming [to Silicon Valley] is not that productive in general.

You’re actually better off, on a probabilistic basis, staying where you are to start a company. You’re much better being a large fish in a small pond, [for example] in Toronto. There’s a lot of people that don’t want to come to the valley, that don’t want to live with the high cost of living. Particularly if you are wanting to start a family, and buy a house.

There’s a practical reality that makes Silicon Valley unattainable for many extremely talented people.

Being in Toronto, or Vancouver, or Winnipeg, or Ottawa, is actually great because if you actually have a good idea and it gets any amount of escape velocity, you can attract some fantastic people because they want to be in those cities. And the economics are much more rational.

Shopify started in Ottawa, and stayed in Ottawa, but still has tremendous capital that came from New York and Silicon Valley. It is possible. That will get easier once there’s a broader class of venture investor in Canada that actually understands product and are willing to take true product and venture risk, versus what I called in that op-ed, “product market fit risk.”

https://www.youtube.com/watch?v=HYCM_Hkrfvs (18:37)


For me, I just copied. A lot of my life is just copying things that I see. There’s not a lot of original thought here. We can all pretend we’re all fucking geniuses. Honestly, be good copiers. It’s the best thing in the world. Be around high-functioning, high-quality people, and just copy the shit that they do. Observe the shit that’s crappy, and don’t do that stuff.

https://www.youtube.com/watch?v=PMotykw0SIk (8:15)

Copy the Important Stuff

If you can copy the Kind bars, you’re going to want to copy the important stuff, like a diverse workforce, a more open-minded, philosophical approach to company building. If it turns out — which I think it will — that that actually drives great outcomes, then all of these young entrepreneurs will just copy it because they want to win. It’ll turn out that it’s also the right thing to do.

https://www.recode.net/2016/3/21/11587128/silicon-valleys-homogeneous-rich-douchebags-wont-win-forever-says (49:30)


I’m not saying my worldview is the best, or right, but it is mine. At the end of the day there are a 150 other fucking guys with their worldview, and they don’t give a shit what you think about their worldview. Why not me? Why not one of you?

In my life now, I’m like: why not? Why the fuck not? Fuck it!

https://www.youtube.com/watch?v=PMotykw0SIk (11:25)


When the average human gives up, [the Warriors’ brains] go into fucking overdrive. There’s this next-level burst. It’s that: When things get hard, can you double down?

https://www.youtube.com/watch?v=PMotykw0SIk (14:30)



I liked how stoic [Mark] was. I’m a bursty person. It’s like what I like in my wife: She is a very good balance to my spiky personality. When I’m on, I’m really good. I can land some outlier that’s not on anybody’s mind. For Mark, I just felt really comfortable just being crazy. He liked that sometimes I could vocalize some stuff that was in his mind and we could regulate; we helped each other.

https://www.recode.net/2016/3/21/11587128/silicon-valleys-homogeneous-rich-douchebags-wont-win-forever-says (15:45)

Patience Through Failure

It was product, marketing, operations. I had an amorphous, fucked up, role for a while. The first year was really bad. I didn’t get anything done. I didn’t do that well. It culminated in November of 2008, I remember this so vividly. I was in Thailand for a wedding, and we had just launched Beacon, which was our first attempt at the advertising platform. It was a huge disaster.

FTC, State Attorney General’s suing us. There were news camera teams at 101 University. I remember getting this email from Mark, and it said something to the effect of, “Hey listen, a bunch of guys have come to me to talk about you, and they really don’t trust you.”

It turned out it was from the business side, the non-technical folks. I was like, “Oh shit, I’m going to get fired.”

Fast-forward four or five months after that, Sheryl joins, and she’s like, “Where’s your head at?”

I was listless. It really took the wind out of my sales.

I said “Well, I kind of feel like I screwed this up, so here’s my shot at redemption.” So I pitched this idea and they said, “What do you call this thing?” This algorithmic, SEO type thing?

I just called it, “Growth.” I’ll be the head of growing stuff. And it was a game-changer. I could completely unpack all of my psychological baggage. Fuck it, I’m not listening to anybody anymore. I’m listening to my inner voice. I don’t care what my parents say.

All the most important decisions that have worked out for me — it’s not their fault — my parents represent the safety, societally-driven, outside-in validated choice. Whenever I’ve been the most successful, I did the inside-out validated choice, and I stuck to my guns.

What was great about Facebook was that, as it was growing, I got a lot of the credit. As a result, I was able to reflect an extreme version of being an executive.

I was super apolitical. I was totally by myself. I played no games. Everytime people would come in with a plan, I’d say, “If you can’t do it for half the number of people, I’ll do it.” I kept calling people out left right and center on everything. I was a curmudgeon. I’d see an Audi in the parking lot, I would take pictures of it and email everybody saying, “This is what is going to fucking destroy us.”

I tried to make sure that we never got lost in ourselves, in the success.

Mark would not have gotten lost, but everyone else.

Great companies, you need a couple of these standard-bearers.

https://www.recode.net/2016/3/21/11587128/silicon-valleys-homogeneous-rich-douchebags-wont-win-forever-says (17:40)

Post-Failure Growth

I said to the [Facebook] board: “I’m proposing to create this thing, I’m gonna call it the growth team, I have all these strategies.” (I had no strategies.) And we’re gonna go and figure out how to engineer product-market fit.

And what that really means is, at least with consumer software, do you understand the psychology of what you’re building to enough of a degree where you can isolate these key points where an average person has this dopamine rush around a reaction to something you’re doing. And then, can you capture it? And, can you make it mechanistic?

And that sounds like a bunch of gobbledygook, and what it meant to Facebook was, I would see how literally people would emotionally react when they saw somebody from 10 or 15 years in their past, as an example. And then we saw that when women would post seven photos men would actually post three more photos, and it’s like all these things and so we just started to document, characterize, measure, analyze. We built it into a massive system that allowed us to amplify what was naturally happening.

So the takeaway when I left and I started Social Capital was, “Wow, we can probably do that.” And the question was, can we do that for any kind of company? Can we do it for an enterprise company? A healthcare company? A rocket company?

And it turns out you can. Because they’re all struggling with the same thing. It’s how do you get a group of people to understand the context of what you’re doing? How do you make it analytical enough so that it’s measureable, so that you can scrub out all the anecdote and the lore. Everybody loves the bullshitter at the water cooler who has their version of history, but we all know they’re a bullshitter, but when nobody else says anything we take it as fact.

You have to basically invalidate that guy. And then you can actually start to have a systematic way of understanding how to make a company successful, and it applies to anything. You know, my wife and I have started a bunch of local businesses in the Palo Alto area to make the culture and… they’re food businesses. Artisanal ice cream in a restaurant. And it applies to there, too.

You create context, you create some measurability, you create some analytical framework, and that’s succeeding. I just think it’s a universal principle: a collection of people against a mission, embodying a similar set of values, understanding context, and then not being able to bullshit. It’s amazing, that last part, how important that is.

https://www.youtube.com/watch?v=D82_ppT2iic (18:33)

Facebook Growth Focus

For three years, between 2008–2011, the only thing we talked about at [Facebook] was growth. It was acquiring good people, giving them their “aha moment,” getting them engaged, and then allowing them to invite others. For three years, that’s all we talked about at every level of the organization. And this focus allows you to execute well, and it gives you clarity of purpose. And so when we have competitive threats, like Google Plus, we knew how to deal with it, because our employees were ready.

https://www.youtube.com/watch?v=6H37iyvEZJ8 (1:14:15)

Facebook Growth Values

If you follow me on Twitter, I posted the values that I had for that team. In my opinion, they seem very benign. But even at Facebook at the time, people thought that they were too extreme. You know, things like very high IQ. And I thought, “What the fuck? Like, you want dummies? How do you win with dummies?”

We would say, “aggressive” and “competitive.” People didn’t like that. We would say, “High quality bar bordering on perfectionism.” But what you realize is, unless you believe that, then you just believe in nothing.

But if you believe in that, you end up self-selecting to those folks that really believe that. When you go and attack a problem, you’re able to work together in a way that just isn’t possible. And that’s what made that place special. And so the next great company that gets built will find a way to thread that magic together. But it’s a people magic. Product market fit exists in a lot of companies.

https://www.youtube.com/watch?v=1dUbrL8b9l8 (25:10)

Leaving Facebook

Look, I realized it was time for me to leave is because I wasn’t doing a good job of getting them to where they needed to be. So if you want to ask me what did I want them to do?

I wanted Facebook to build a phone. I think that was well-known. I think it was also well-known that I was building a version of a phone. Whatever.

At the time, it didn’t make sense because it just needed capital and focus and the kind of separation… almost like a Google X kind of an approach, that I think was kind of antithetical to the culture, at the time, of that company. And, in fairness, I think that was absolutely the right decision, and it’s a failure of me, because I also exacerbated that tension.

I had a tremendous amount of political and social capital at that company because of what I was doing. I like lost myself for a little bit and fed my own ego and was on this mission to build a phone, in a not really great collaborative way, using a bunch of decisions that I made myself. That stuff just never ends well.

This was an insight also into what I’m good at. I’m not good at bringing people along. I mean, I’m good at building products and bringing small teams along, and then building things. But I’m not good at leading thousands of people in like an organized way. I’m good at telling 1,000 people what to do, but I’m not good at leading 1,000 people in a collaborative, “Let me get you over the line.” That’s not how I roll. It’s like, “This is what we’re fucking doing, and we’re gonna do it.”

That dog doesn’t hunt at a multi-thousand person company.

https://www.youtube.com/watch?v=pDVDWNguPs4 (21:55)

Maximum Value

Companies generally only give employees 5–10% of the value that they create. As much value as I created at Facebook, I captured maybe 5% of that value for me, economically. That’s just the scenario. That’s how companies can get built to be profitable.

An interesting question would be, well what would happen if companies were forced to pay more towards the theoretical ceiling of what an individual generated for that company? 50% of the value. 80% of the value. You can’t do that in the absence of transparency.

When you’re hiring me, it’s not like every other person who’s trying to hire me also knows.

So to me, it’s a really disruptive idea that the very, very, good can basically become like free agents in sports. You can’t hide Lebron’s value. Lebron gets max value. Dwight Howard gets max value. Brent Seabrook gets paid what Brent Seabrook gets paid. It’s beautiful. If you bring that sort of clarifying logic into the business world, it could be really transformational, and it lifts up all these amazing people from all the four corners of the world.

https://www.youtube.com/watch?v=pDVDWNguPs4 (41:36)

Win or Learn

I like to consider myself a free radical. Meaning, I’m very bursty. I’m unpredictably good, but also unpredictably bad. I try to have a relationship with our founders where they can just tell me, “You need to chill out, you need to stop, you’re not being helpful right now.” Because that’s a lot of it. But in that safe-zone, every now and then, we land something that I think is exceptional.

Like as an example, so Punit [Singh Soni] and I work together right now. He’s an EIR. It’s so funny, he doesn’t want to talk to me because it’s just too bursty. You can’t deal with it all. He has an amazing team that he’s working with, so it’s like, “I’m just gonna come to a point of view, I’ll give you like 30 minutes to give me some feedback,” and literally we sit in the room and he just goes, “I just need yes, no’s, yes – no – yes – no – yes – no – yes – no. [Laughs]

And we try to react and interchange and then he goes off. He makes different decisions, hopefully some better. I make a different set of conclusions because of his feedback so… Yeah, I’m not going to claim like I’m a know-it-all or like a company whisperer, that’s not what I do.

I have a very precise sense of what is possible in the future, and I’m not afraid to lose money. That’s the best two things you can have as a VC. I think. Because I just don’t care about the money. And so it’s wonderful. All we’re ever going to do is learn, or be right.

In no context are we ever wrong. We’re learning or we’re right, that’s it.

https://www.youtube.com/watch?v=D82_ppT2iic (31:54)

Culture vs. Capability

Culture is about the kinds of people you work with. Capability is about what they’re actually good at. And what I would tell you is that culture wins every time. It’s always amazing to me that we hear of stories of teams that have a better culture beating other teams that are either smarter, or bigger, or faster… and that’s the story of entrepreneurship as well. Culture always beats capability.

https://www.youtube.com/watch?v=6H37iyvEZJ8 (1:17:50)


To be honest with you, we did not stick out a shingle that said, “We invest in healthcare.” We tried to tell folks, and mostly it’s just our network, “Find me the craziest thing you can. Find me the entrepreneur that’s the most frustrated right now with an inability to raise capital, because they’re not saying what other people want to hear. Send that person to our doors.”

And that’s what we did. And what happens is that when you do the first few key interesting investments along that premise, those people tell their friends, who also tend to be these crazy, eccentric, blighted people because they don’t represent the canonical sense of what is a great venture investment anymore in Silicon Valley. It just perpetuates.

And to be honest with you, I think it’s better that we don’t know anything about these spaces. We learn with them, which means that we’re more inclined to take the kind of disproportionate risk that traditional folks won’t take.

https://www.youtube.com/watch?v=59uTUpO8Dzw (10:40)


It’s hard enough to win. We do ourselves a huge disservice when we cheat. I want to compete really hard, at everything I do. But I also believe that everybody else is going to play fairly by the rules as well, and then we’ll see who wins on the field of battle, and that’s cool. Because then, when you fail, you can actually identify why it didn’t work, get better, and try it again, and the next time you’re that much more likely to [win.] But it all presupposes fairness. And I just have this real fundamental issue with this concept of cheating. It fuckin’ burns me. And that’s not fair because, again, who gets screwed? The employees get screwed.

https://www.youtube.com/watch?v=Njj6HZvixK8 (21:40)

Learning Grace

There is an amazing executive that I interacted with in the 2000s, and he was like the COO of TIVO. A southern guy. He had the most amazing quote for me.

I was the junior guy, I was there to take notes. He stopped me in the elevator. The big guys walk out. He said, “Listen, you said nothing in the meeting. I’m going to give you a little piece of advice. You saw how I behaved in that meeting. I didn’t have to give you guys anything, but I gave you a lot. Be careful who you fuck on the way up, because they’ll fuck you on the way down.”

That seared in my mind to this day. The graciousness is a thing for us all to learn.

https://www.recode.net/2016/3/21/11587128/silicon-valleys-homogeneous-rich-douchebags-wont-win-forever-says (1:01:33)