Post-Failure Growth

By editor on February 20, 2018 — 2 mins read

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. (18:33)

Posted in: Leadership

Editor's Note

These are Chamath Palihapitiya's words. They are probably some of the best thoughts on VC, business, and life, but were scattered around the Internet. They live now in this archive.