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Social Capital Investor: We Need to Recapture Imaginations in Tech, or Stay Stuck in On-Demand Muck

We can choose between long-term investments or "immature, self-absorbed dipshits," says Social Capital CEO.


Chamath Palihapitiya, CEO of Social Capital, is a well known and prolific Silicon Valley investor in startups. He’s also incredibly peeved about the state of startup investing today.

The venture capitalist blasted the influx of on-demand companies and his fellow investors in colorful language, although without naming names, in a wide-ranging conversation with Re/code Senior Editor Ina Fried at the M1 Mobile First Summit on Tuesday.

“Right now, it’s a massive IQ test about whether we want to make long-term investments,” he said — investments that tackle pressing global issues, like climate change, clean energy and health care. “Or whether we’re just a bunch of immature, self-absorbed dipshits.”

“And right now, we’re trending toward the latter.”

The fault, claimed Palihapitiya, an early Facebook employee, lies partly with short-sighted investors. Also at fault are investment rules that put limitations on who and how funds invest. He postulated a Kickstarter-like model that opens up investment for a wealth of people looking to start companies (“millions”) worldwide, particularly in emerging markets, a region in which Social Capital has invested and plans to invest more, he said. “It feels kind of foolish that we can let your doctor operate on you, but not invest in your company,” he added.

Palihapitiya, who is a board member of the NBA’s Golden State Warriors, also spoke about tech’s struggles with diversity and his philosophy on sports.

But his sticking point was the widening gap in funds pouring into companies of import versus futile ones. “Our imaginations aren’t captured in this grandiose way,” he said. “So what we’re seeing is soup on demand. Make-up on demand.”

My colleague Ina tried to interject, but Palihapitiya went on. “Car washes on demand. Clothes on demand. Glasses on demand.”

Last year, Palihapitiya quietly sold his 11 percent stake in the dating app Tinder.

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