Chamath Palihapitiya(Photo: Marco della Cava, USA TODAY)
SAN FRANCISCO — Social Capital's Chamath Palihapitiya dropped by USA TODAY's San Francisco bureau this week, just in time to lob a few grenades at Apple, Twitter and Snap.
The former senior executive at Facebook is founder and CEO of Social Capital, a Silicon Valley venture capital firm that backs companies in areas such as healthcare and education. It was an investor in Yammer (bought by Microsoft) InstaEdu (bought by Chegg) and Slack (valued at nearly $4 billion).
Palihapitiya was born in Sri Lanka, grew up in Canada, and graduated with a degree in electrical engineering from the University of Waterloo. Chamath is also an owner and director of the Golden State Warriors. The interview has been edited for length and clarity.
HE'S WAIT AND SEE ON WHAT EFFECT A TRUMP PRESIDENCY WILL HAVE ON SILICON VALLEY: "All of these executive orders don't get to the heart of what his real legislative agenda is yet. It's important for us to save our bullets to really understand what those things are so that we can support the things that are good and push back on the things that are not so good. There's a lot of things that he can do to actually drive a lot of good allocation of capital within the U.S. I want to make sure that that happens."
SILICON VALLEY NEEDS TO STOP BUILDING APPS AND BUILD MORE VALUE: Silicon Valley has to focus on solving tough problems that help create more employment and opportunity in the U.S. instead of the latest "late night pizza delivery app."
"There has been an increasing realization in Silicon Valley that we have fallen in love with a very rigid definition of success," he said. "We should not lose sight of the core root problems and we should put pressure on people to solve those. I think we are learning slowly that working on hard things that are not obvious are part of the formula."
INVESTMENTS HE REGRETS NOT MAKING: "I wish I had invested in the series A of Snapchat and Uber.
BUT HE'S NOT BUYING INTO SNAP IPO: He says Snap, which has a voting rights structure where common shareholders get no votes, is more like Twitter, which had growing engagement but not a growing user base, than Facebook, which had both when it went public.
"When Facebook went public they didn't have a particularly strong model of governance. But it did have compounding users, compounding usage, and it was already a very profitable business. When you look at Twitter when it went public, it had governance and it had usage but it didn't have users. When you look at Snapchat, it doesn't have governance. It doesn't have compounding growth in users but it has compounding growth in usage. As a risk manager, I can overlook governance if I have massively compounding users and usage. But if one of those things is not there, I am not going to take the risk. That doesn't mean I'll be right. I could very well be wrong."
APPLE IS A LUXURY BRAND, NOT A TECH INNOVATOR: He says Apple is no longer a tech company but a luxury brand with pricing power. "I can tell you the laundry list of things that Google has created in the last few years. I can tell you a laundry list of things that Amazon has created and that Facebook has created. Being a tech company has to be about a pattern of repetitive innovation.
"It's not to take away from Apple as a brand. I love it. I love the products. As a consumer, I am deeply loyal to it. They could probably charge an extra $100 or $200 and I would buy it. They could probably make shoes and sweatpants and I would probably buy those, too. To me it's like a modern version of Louis Vuitton but it's not the technological tip of the spear anymore. "
CITIES HOLD THE FUTURE OF SELF-DRIVING CARS: "I think the thing that is underreported is the leverage of the infrastructure owner. What I mean by infrastructure are the roads, the highways and the bridges, and that really comes down to cities. It is very reasonable to expect that cities will be the ones that will really pave the way. It would be insane for cities not to do that. Mayors will look like geniuses, board of supervisors will look like geniuses."
BUT HE'S NOT HIGH ON TWITTER: "It's kind of like a wet noodle," he says. Will it be acquired? "It's not clear. That's the problem with a wet noodle. It doesn't have a home sometimes."
Is Jack Dorsey the right leader for Twitter? "You are not getting all of Jack Dorsey. You are getting half of Jack Dorsey. He hasn't given Twitter a full shot. It's hard to run one company well, so to run two, well, I think you see what happens. You can run one kind of well and one not so well. I just think at some point he has to do the right thing, and then you can tell. So maybe Jack has the right plan. But then he should spend all day there."
ON WHY THE GOLDEN STATE WARRIORS ARE SO SUCCESSFUL: "Such a great group of people. Just great, great people. The athletic ability is the byproduct of their ability to work in a system toward a common goal. It's a system that works."
HE'LL GIVE AWAY ALL HIS MONEY BEFORE HE DIES (BUT DON'T CALL IT PHILANTHROPY): "I believe in charity. Philanthropy is when you put your name around it and market it. I don't feel comfortable doing that. My wife and I give a lot, but we do it privately and we do it without our name."