Chamath Palihapitiya is a venture capitalist, engineer, CEO of Social Capital, and co-host of the All-In Podcast. Please support this podcast by checking out our sponsors:
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OUTLINE:
0:00 - Introduction
1:05 - Childhood and forgiveness
14:49 - Money and happiness
21:40 - Poker
25:07 - Mistakes
35:58 - Early jobs
37:35 - Facebook
55:21 - Energy
1:03:01 - Cloud computation
1:07:17 - Fixing social media
1:17:08 - Trump's Twitter ban
1:22:13 - Kanye West
1:33:25 - All-In Podcast
1:42:41 - Nuclear war
1:54:17 - Startups
2:02:48 - Work-life balance
2:13:57 - Teamwork
2:25:18 - Energy transition
2:35:51 - Silicon Valley culture
2:39:10 - Activism culture
2:43:32 - Advice for young people
2:50:07 - Meaning of life

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In terms of your mistakes, society tells you don't make them because we will judge you and we will look down on you.

And I think the really successful people realize that actually, no, it's the cycle time of mistakes that gets you to success.

Because your error rate will diminish the more mistakes that you make.

You observe them, you figure out where it's coming from.

The following is a conversation with Chamath Palihapitiya, a venture capitalist and engineer, founder and CEO of Social Capital, previously an early senior executive at Facebook, and is the co-host of the All in podcast, a podcast that I highly recommend for the wisdom and the camaraderie of the 4 co-hosts, also known as besties.

To support it, please check out our sponsors in the description.

And now, dear friends, here's Chamath Balahapatiya.

You grew up in a dysfunctional household on welfare.

What were, for you personally, psychologically, some difficult moments in your childhood?

I'll answer that question in a slightly different way, which is that I think when you grow up in a household that's defined by physical abuse and psychological abuse, you're hypervigilant all the time.

And so it's actually easier for me to point to moments where I was happy or I felt compassion or I felt safe.

Otherwise, every moment, I'll give you a couple of examples.

Like, I was thinking about this a while ago.

There was a tree outside of my apartment where we lived when I was growing up.

And my father would sometimes would make me go outside to take the tree branch that he would hit me with.

And so you can imagine if you're a 10, 11 year old kid and you have to deal with that, what do you do?

Well, a hypervigilant child learns how to basically estimate the strength of these branches, right?

You have to estimate his anger and estimate the effective strength of branches and bring back something because I remember these moments where if it was he would look at it and then he would make me go out again and get it, right?

Or there was a certain belt that he wore that had this kind of belt buckle that stuck out.

And you just wanted to make sure if that was the thing that you were going to get hit by, that it wasn't the buckle facing out because that really hurt.

And so you became hyper aware of which part of the buckle was facing out versus facing in in those moments.

And there are like hundreds of these little examples, which essentially I would say the through line is that you're just so on edge, right?

And you walk into this house and you're just basically trying to get to the point where you leave the house.

And so in that microcosm of growing up, any moment that's not like that is seared in my memory in a way that I just can't describe to a person.

I volunteered when I was in grade 5 or 6, I can't remember which it was, in the kindergarten of my school.

And I would just go and the teacher would, you know, ask you to clean things up.

And at the end of that grade 5 year, she took me and 2 other kids to Dairy Queen.

And I'd never gone to a restaurant, literally, because we just didn't have the money.

And I remember the first time I tasted this Dairy Queen meal it was like a hamburger, fries, a Coke, and a Blizzard.

And I felt so special, because you're getting something that most people would take for granted.

Oh, it's a Sunday, or I'm really busy, let me go take my kid to fast food.

I think that until I left high school, I think, and this is not just specific to me, but a lot of other people, it's you're in this hypervigilant loop, punctuated with these incredibly visceral moments of compassion by other people.

A different example, we had such a strict budget and We didn't have a car.

And so, you know, I was responsible with my mom to always go shopping.

And so I learned very early on how to, you know, look for coupons, how to buy things that were on sale or special.

And we had a very basic diet because you have to budget this thing really precisely.

But the end of every year where I lived, there was a large grocery chain called Loblaws.

And Loblaws would discount a cheesecake from $7.99 to $4.99.

And my parents would buy that once a year and we probably did that 6 or 7 times and you can't imagine how special we felt myself my 2 sisters we would sit there we would watch the you know the New Year's Eve celebration on TV, we would cut this cheesecake into 5 pieces.

So that's sort of how my existence when I was at that age is for better or for worse, that's how I remember it.

The hypervigilance loop, is that still with you today?

If you put yourself in the mind of a young child, the thing that that does to you is at a very core basic level, it says you're worthless.

Right, because if you can step outside of that and you think about any child in the world, they don't deserve to go through that.

And at some point, by the way, I should tell you, I don't blame my parents anymore.

It was a process to get there, but I feel like they did the best they could.

And they suffered their own issues and enormous pressures and stresses.

And so, I've really, for the most part, forgiven them.

How did you, sorry to interrupt, let go of that blame?

That was a really long process where, for I would say the first 35 years of my life, I compartmentalized and I avoided all of those memories.

Going back to this self-worth idea, if you're taught as a child that you're worthless, because why would somebody do these things to you?

You think to yourself very viscerally you're worth nothing.

And so then you go out and you seek external validation.

Maybe you try to go and get into a great college.

You try to demonstrate in superficial ways with the car you drive or the clothes you wear that you deserve people to care about you, to try to make up for that really deep hole.

But at some point, it doesn't get filled in.

And so for me, what happened was in the course of a 6 month period, I lost my best friend and I lost my father.

And it was really like the dam broke loose because the compartmentalization stopped working because the reminder of why I was compartmentalizing was gone.

And so I had to go through this period of disharmony to really understand and steel man his perspective.

And can you imagine trying to do that, to go through all of the things where you have to now look at it from his perspective and find compassion and empathy for what he went through?

And then I shift the focus to my mom and I said, well, you were not the victim actually, you were somewhat complicit as well because you were of sound mind and body and you were in the room when it happened.

So then I had to go through that process with her and steel man her perspective.

At the end of it, I never justified what they did, but I've been able to forgive what they did.

And at the end of the day, they did the most important thing, which is they gave me and my sisters a shot by emigrating, by giving up everything, by staying in Canada, and doing whatever it took between the 2 of them to sort of claw and scrape together enough money to live so that my sisters and I could have a shot.

But it's been a long process of that steel manning so that you can develop some empathy and compassion and forgive.

Do you think if you talked to your dad shortly after he died and you went through that process or today, you'll be able to have the same strength to forgive him?

I think it would be a very complicated journey.

I think I've learned to be incredibly open about what has happened and all of the mistakes I've made, I think it would require him to be pretty radically honest about confirming what I think he went through, because otherwise it just wouldn't work.

Otherwise, I would say, let's keep things where they are, which is I did the work with people that have helped me, obviously.

But it's better for him to just kind of hopefully He's looking from some place and he's thinking, it was worth it.

All of this, because I think the immigrant challenge, or not even the immigrant challenge, the lower middle class challenge, anybody who really wants better for their kids and doesn't have a good toolkit to give it to them, some of them, just they choke up on the bat.

They just get so agitated about this idea that all this sacrifice will not be worth it, that it spills out in really unproductive ways.

And their self-evaluation, introspection, they have tunnel vision, so they're not able to often see the damage that did.

I mean, I know, like yourself, a few successful people that had very difficult relationships with their dad.

And when you take the perspective of the dad, they're completely in denial about any of it.

So if you actually have a conversation, there would not be a deep honesty there.

And I think that's maybe in part the way of life.

Yeah, and I remember pretty distinctly after I left and in my middle 30s, where by all measure, I had roughly become reasonably successful.

And my dad didn't particularly care about that, which was so odd, because I had to confront the fact that whether it was a title or money or press clippings, he never really cared.

He moved on to a different set of goals, which was more about my character and being a good person to my family and really preparing me to Lead our family when he wasn't there.

And that bothered me because I thought I got to the finish line and I thought there was going to be a medal.

Meaning like I can tell you Lex, he never told me that he loved me.

And I thought there's gonna be something, some gold star, which never appeared.

And so that's like a hard thing to kind of confront because you're like, well, now what is this all about?

But then I realized, well, hold on a second.

There were these moments where in his way, again, putting yourself in his shoes, I think he was trying to say he was sorry.

He would hold my hand, you know, and he would interlock the fingers, which I felt is, that's a really intimate way of holding somebody's hand, I think.

So these are the things that are just etched in, at least in my mind, and At the end of it, I think I've done a decent job in repairing my relationship with him, even though it was posthumous.

It does make me wonder in which way you and I, we might be broken and not see it.

It might be hurting others and not see it.

Well, I think that when you grow up in those kinds of environments, and they're all different kinds of this kind of dysfunction, but if what you get from that is that you're not worthwhile, you're less than many, many other people, when you enter adulthood or, you know, semi-adulthood in your early 20s, you will be in a cycle where you are hurting other people.

Hopefully you find somebody who holds you accountable and tells you and loves you enough through that.

But you are going to take all of that disharmony in your childhood and you're going to inject that disharmony into whether it's your professional relationships or your personal relationships or both, until you get to some form of rock bottom and you start to repair.

And I think there's a lot of people that resonate with that because they have each suffered their own things that at some point in their lives have told them that they're less than.

And when you cope, eventually those coping mechanisms escalate, and at some point it'll be unhealthy, either for you, but oftentimes it's for the people around you.

Well, from those humble beginnings, you are now a billionaire.

How has money changed your life or maybe the landscape of experience in your life?

It doesn't buy happiness, but it buys you a level of comfort for you to really amplify what happiness is.

I kind of think about it in the following way.

Let's just say that there's a hundred things on a table, and the table says, find happiness here.

The way that the world works is that many of these experiences are cordoned off a little bit behind a velvet rope where you think that there's more happiness as the prices of things escalate, right?

If you live in an apartment, you admire the person with the house.

If you live in a house, you admire the person with the bigger house.

That person admires the person with an island.

Some person drives their car, admires the person who flies, who admires the person who flies business class, who admires a person who flies first to private.

There's all of these escalations on this table.

And so they just naturally assume that items 7 through 100 is really where happiness is found.

And just to tell you the finish line, I've tried a hundred and back and I've tried 2 more hundred to it and happiness isn't there.

I read a study and I don't know if it's true or not, but it said that, the absolute sort of like maximal link between money and happiness is around $50 million.

And it was just like a social studies kind of thing that I think 1 of the Ivy Leagues put out.

And underneath it, the way that they explained it was because you could have a home, You could have all kinds of the creature comforts.

And then you were left to ponder what it is that you really want.

I think the challenge for most people is to realize that this escalating arms race of, you know, more things will solve your problems is not true.

It's this idea that you are on a very precise journey that's unique to yourself.

You are playing a game of which only you are the player.

And you have a responsibility to design the gameplay.

And I think a lot of people don't realize that, because if they did, I think they would make a lot of different decisions about how they live their life.

I mean revert to basically running around asking other people, what will make you like me more?

What will make me more popular in your eyes?

Like for example, it becoming harder to find people you can trust?

I think the most negative aspect is that it amplifies a 360 degree view of your personality.

Because there are a lot of people and society tells you that more money is actually better, you are a better person somehow, and you're factually more worthwhile than some other people that have less money.

But when you're given that kind of attention, it's very easy for you to become a caricature of yourself.

That's probably the single worst thing that happens to you.

I think all I've ever seen in Silicon Valley, as an example, is that when somebody gets a hold of a lot of money, it tends to cause them to become exactly who they were meant to be.

They're either a kind person, they're either a curious person, they're either a jerk, they're either cheap, and they can use all kinds of masks, but now that there's no expectations and society gives you a get out of jail free card, you start to behave the way that's most comfortable to you.

So you see somebody's innate personality.

And that's a really interesting thing to observe because then you can very quickly bucket sort Where do you want to spend time and who is really additive to your gameplay and who is really a negative detractor to your gameplay?

You're an investor, but you're also a kind of philosopher.

You analyze the world in all those different perspectives on all in podcasts, on Twitter, everywhere.

Do you worry that money puts you out of touch from being able to truly empathize with the experience of the general population, which in part, first of all on a human level, that could be limiting, but also as an analyst of human civilization, that could be limiting.

I think it definitely can for a lot of people, because it's just an abstraction for you to stop caring.

I also think the other thing is that you can very quickly, especially in today's world, become the scapegoat just to use a Girardian, like Rene Girard, if you think about mimetic theory in a nutshell, we're all competing for these very scarce resources that we are told is worthwhile.

And if you view the world through that Girardian lens, what are we really doing?

We are all fighting for scarce resources, whether that's Twitter followers, money, acclaim, notoriety, and we all compete with each other.

And in that competition, Girard writes, the only way you escape that loop is by scapegoating something or somebody.

I think we are in that loop right now where just the fact of being successful is a thing that 1 should scapegoat to end all of this tension that we have in the world.

I think that it's a little misguided because I don't think it solves the fundamental problem.

And we can talk about what the solution to some of these problems are, but that's, I think, the loop that we're all living.

And so if you become a caricature and you feed yourself into it, I mean, you're not doing anything to really advance things.

We're talking about the corrupting nature of money.

In a poker game, when you sit down, it's chaos, especially like in our home game, there's a ton of big egos, there's people always watching, rail birding the game, all kinds of interesting folks.

And in that, somebody needs to establish hygiene and rules.

And I really care about the integrity of the game.

And it would just require somebody to just say, okay, enough.

And so, and then people were just like, okay, stop dictating.

So who to you, speaking of which, is the greatest poker player of all time and why is it Phil Hellmuth?

You know, Muth probably knew this question was coming.

I think Hellmuth is the antidote to computers more than any other player playing today.

And when you see him in a heads up situation, so I think like he's played 9 or 10 heads up tournaments in a row, and he's played like basically call it 10 of the top 20 people so far, and he's beaten all but 1 of them.

When you're playing heads up, 1v1, that is the most GTO understandable spot, meaning game theory optimal position.

That's where computers can give you an enormous edge.

The minute you add even a third player, the value of computers and the value of their recommendations basically falls off a cliff.

So 1 way to think about it is Helmuth is forced to play against people that are essentially trained like AIs.

And so to be able to beat 8 out of 9 of them means that you are playing so orthogonally to what is considered game theory optimal.

The judgment to say, well, in this spot, I should do X, but I'm going to do Y.

It's not dissimilar in chess, like what makes Magnus Carlsen so good.

Sometimes he takes these weird lines, he'll sacrifice positions, you know, he'll overplay certain positions or certain, you know, bishops versus knights and all of these spots that are very confusing.

And what it does is it throws people off their game.

I think he just won a recent online tournament And it's like by move 6, there is no GTO move for his opponent to make because it's like out of the rule book.

I read the quote, it was like he probably read some game in some bar in Russia in 1954, memorized it.

And all of a sudden by 6 moves in, the computer AI is worthless.

There is 1 person that I think is superior.

And I think it's what Daniel also said, and I would echo that, because I played Phil as well, but Phil Ivey is the most well-rounded, cold-blooded, bloodthirsty animal.

He's just, and he sees into your soul, Lex, in a way where you're just like, oh my God, stop looking at me.

We've played and he crushes the games, crushes the games.

So What does feeling crushed mean and feel like in poker?

Is it like that you just can't read at all, you're being constantly pressured, you feel off balance, you try to bluff and the person reads you perfectly, that kind of stuff?

So this is a really, really excellent question because I think this has parallels to a bunch of other things.

Okay, let's just use poker as a microcosm to explain a bunch of other systems or games.

Maybe it's running a company or investing.

Okay, So let's use those 3 examples, but we use poker to explain it.

Well, success looks like you have positive expected value.

In poker, the simple way to summarize that is your opponent, let's just say you and I are playing, are going to make a bunch of mistakes.

There's a bunch of it that's going to be absolutely perfect.

And then there's a few spots where you make mistakes.

And then there's a bunch of places in the poker game where I play perfectly and I make a few mistakes.

Basically, your mistakes minus my mistakes is the edge, right?

If I make fewer mistakes than you make, I will make money and I will win.

You have a pool of human capital that's capable of being productive in the world and creating something.

But you are going to make mistakes in making that.

Maybe it doesn't completely fit the market.

Maybe it actually doesn't require all of the people that you need, so the margins are wrong.

And then there's the competitive set of all the other alternatives that customer has.

Their mistakes minus your mistakes is the expected value of Google, Facebook, Apple, etc.

Every time you buy something, somebody else on the other side is selling it to you.

But their mistakes minus your mistakes is how you make a lot of money over long periods of time as an investor.

Huge mistake on their part, minimum mistakes on your part.

The difference of that is the money that you made.

So life can be summarized in many ways in that way.

So the question is, what can you do about other people's mistakes?

Maybe you plant a spy inside of that other person's company to sabotage them.

I guess there are things at the edges that you can do.

But my firm belief is that life success really boils down to how do you control your mistakes?

The way you control your mistakes is by making a lot of mistakes.

So taking risks is somehow a way to minimize the number of mistakes.

You wanna find somebody to be deeply connected with.

Do you do that by not going out on dates and- Yes.

You're the only person that thinks that's the answer to that question.

Like you have to date people, you have to open yourself up, you have to be authentic and like you give yourself a chance to get hurt.

So you know what happens when you get hurt?

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Chamath Palihapitiya: Money, Success, Startups, Energy, Poker & Happiness | Lex Fridman Podcast #338