Chamath Palihapitiya: People in Silicon Valley are deeply unhappy
Recode Decode, hosted by Kara Swisher

Unlike many poor people who work hard jobs and don't have time to be unhappy, Chamath, with all his billions, was able to find time to rest and to reflect, and to identify whether he is actually living a successful life.

Not at all. He took a few billion dollars under management and turned it into a few more billion dollars. He promised returns, and he achieved them. He did not promise anyone that he would be doing this forever. He sums it up like this: "You are fucking welcome!"

A VC's job is to deliver return, for which they take money, hire competent people, and invest to achieve those return. It is not a VC's job to become anyone's slave and to continue working forever. You can retire any time you want.

The ability to be emotionally intimate and authentic with other people is really hard and is a skill that can be trained, if it is not something you know how to do naturally.

People in the Silicon Valley are the most unhappy they have ever been, they are the least civilly engaged and the most emotionally detached from their lives; they feel empty. To do something meaningful, even in business, you have to have an emotional spark at some point, and if you are internally preoccupied with your own happiness, or the lack of it, then when you get into the office it becomes really hard to create something truly great.

We have an entire generation of young that grew up in front of their phones, people who don't know how to connect with the real world and how to find happiness. People see the world as they live it, and unhappy people see a world that is overall unhappy.

Back in the day people went to Silicon Valley because they wanted to build companies; the offices were run down, and the glamour was none. People were poor, at least to start, but they were all excited about what they were doing. Now every office looks like it came from the Silicon Valley show, but people inside are deeply unhappy.

No, if you were a jerk, then money would just make you into a jerk with more stuff, but that's not the problem. According to Chamath, we have not created a new generation of heroes who can demonstrate a set of values and choices that are worthwhile to live for.

A typical company would go through the same stages. A company would start at the "Product market fit" where the goal is to create something people want. It would then move to growth, when the goal is to make sure you can give your product to everyone who wants it. Then eventually when the products line is exhausted, the company will try to get all the revenue it can out of the existing users. In the transition to revenue they do what they are supposed to do for their shareholders, they maximise revenue. The implications of this eventual transition, which are implicitly demanded by the society and the government, are for us to bear.

The society has a responsibility to work on our mental health. We need to start talking about this as a problem, to talk about our issues, be able to share and find support. We need to realize that feelings and emotions are normal and there is an enormous number of people in the world who feel the same way.

People are not feeling all that happy about who they are, but instead of fixing themselves, they choose to hate on someone else.

Anger is a fantastic motivator for getting from 0 to 1, to catalyze progress. It is never the happy people who are able to make huge leaps forward, in Chamath's experience. At some point, however, it is important to transition from anger to making a positive impact, as most people are motivated by positivity and a sense of being able to make change.

There is an enormous tax that we've been paying to big tech startups for hosting and advertising our products. Those costs account for roughly 40 cents on every dollar. Layer in the headcount costs, and it becomes nearly impossible for startups to grow, never mind to become profitable and successful. Only the companies who can raise the most and not die end up succeeding in this environment.

The steeper the growth rate of a company, the more appealing is is as an investment, so as long as the company can keep raising money, early investors are made to look like the geniuses.

This dynamic encourages investors to push the company to raise more and more money, and soon enough, the CEO has no choice but to raise more. No money and the companies goes out of business.

The cycle continues, as the company bleeds cash and gets further and further diluted. Startup employees get screwed holding bags of worthless diluted equity, while the VCs are getting rich off the funds fees.

Chamath thinks the next crisis is coming in 3-5 years in the debt markets. When companies start defaulting on their debt, the LPs are going to lose a tremendous amounts of money. When huge loses come in, those LPs are going to start liquidating, starting at hedge funds with easy redemption cycles. It won't be enough because the loses will outpace the bills. At that point the LPs are going to sell their venture investments, and that's when they will start asking hard questions around valuations, and why their money was actually put to play in these worthless companies. This impending crash is why venture capitalists are accelerating their fundraising and investments, raising more and investing more, while they still can.

Find an idea that is relatively easy to start, but gets more and more courageous as you get going, and something that will be shockingly difficult if it succeeds. Kind of like free soloing El Capitan.

powered by SmashNotes