Chamath Palihapitiya Outlines His Vision for Social Capital


Chamath Palihapitiya, who started his career as a disruptive force in Silicon Valley with Facebook has big ambitions for Social Capital venture capital firm and its driving global digital transformation forward. As well as upending Wall Street as the king of SPACs.

What started as a venture-capital firm in 2011 could be a Berkshire Hathaway for the 21st century and social media generation.

In this Bloomberg Front Row interview, Wall Street’s king of special-purpose acquisitions companies, or SPACs, explains why he hopes to create as much wealth as Warren Buffett, why he’s betting on Bitcoin and Tesla, and how he’s trying to solve for inequality and climate change. Palihapitiya spoke exclusively with Erik Schatzker on Bloomberg’s “Front Row.”

Covering topics from:

  • Day Traders, hedge funds, and the GameStop Reddit moment.
  • How he made his first $10 Billion.
  • The next frontiers for Social Capital.
  • Chamath's political ambitions.

 


30 best insights and pieces of advice for entrepreneurs

With collective intelligence being a disruptive innovation theme we are investing in. We found these great collective insights from entrepreneurs and annual series from First Round ventures to be a great resources.

The 30 Best Pieces of Advice for Entrepreneurs in 2020

Here on the Review, we have an annual tradition that we look forward to each January. We press pause, pour ourselves a big cup of coffee, and pore over each article we published the previous year, with an eye for the very best pieces of advice that we’re still thinking about, one year on.

Since the Review’s genesis in 2013, we’ve interviewed hundreds of folks who are among the very best at what they do — and 2020 was no exception. We cherish the opportunity to carefully parse through the advice of the experts that were featured on the Review’s digital pages — from repeat successful founders, to events gurus, to top psychologists. (If you’re curious to see how this collection has evolved over time, check out previous editions from 201920182017201620152014 and 2013.)

As we leafed through what we published in 2020, a few themes stood out to us. No 2020 retrospective would be complete without a nod to “these unprecedented times” (and we’ve given up combing the thesaurus for any language to replace this rote phrasing). Despite the whirlwind of changes and explosion in content since 2013 — from the rise of Substack newsletters to the endless Twitter threads full of advice for entrepreneurs — our aim has remained consistent over the years. We seek not to chase trends or tackle specific industry verticals, but rather to publish enduring, evergreen company-building advice that both stands out from the crowd and can be put to use right away.

But this past year there was a pressing need to cover unexpected, timely topics where folks were clamoring for guidance. With our editorial plans upended, we quickly shifted gears. More importantly, founders, leaders and experts stepped forward, generously opening up their playbooks to offer wisdom that met the moment, from navigating the lightning-quick shift to virtual workmanaging through turmoil, and adjusting your leadership mindset when it feels like you’re running on empty. You may have seen a lot written on these particular subjects across the internet, but as is always our goal, we hope the Review’s takes offered something a bit different.

2020 also brought the strength of pooling wisdom and leaning on community into sharp focus. No one person has all of the answers, and there’s power in bringing together plenty of different perspectives — some that you may agree with, and others that may not quite ring true for you. We tapped into that impulse more than ever this year, whether it was calling on a slew of recession-era investors and CEOs for their hard-won wisdom in the earliest days of the crisis, drawing on the experiences of over a dozen design leaders, or crowdsourcing the best tips on managing up and must-ask interview questions for candidates.

We even pushed ourselves out of our comfort zone of the written word and launched a brand-new podcast, In Depth, where we deliver the same signature interview style we’ve cultivated on the Review directly to your headphones.

We may not know what 2021 has in store, but as we reflect on the year that’s passed and what’s still to come, our sincere hope is that you continue to find a dose of inspiration, an actionable new tactic to try, or a compelling story to sink into whenever you turn your attention to the Review. We know the time you spend diving into an article or popping in your headphones is more precious than ever, and we continue to be sincerely grateful to all of you for spending it with us. Here are the 30 best pieces of advice from our articles last year — take them with you as we look towards brighter days to come.

1. Bookmark these 40 questions to ask interviewers on your next job hunt.

When it comes to interview advice, there’s plenty to go around for hiring managers. But for candidates, when the tables inevitably turn and the interviewer asks, “Do you have any questions for me?” it’s critical to not only stand out from the crowd, but also unearth some valuable information about whether this prospective company’s a good fit.

That’s why we published a follow-up to one of our most popular Review articles, sourcing ideas for questions candidates should ask from some of the sharpest folks we could find. Our aim? A robust roster of questions that go much deeper than “What’s the culture like?”

We’ll highlight a handful of our favorites below. Our advice? Narrow down your list of must-ask questions to the hiring panel by focusing on your deal-breakers — what would make you walk away?

  • What are the top three customers that you’ve won, and the top three customers that you’ve lost? “You get a real sense of how the company is doing in the market, what's working well — and what's not,” says Max Branzburg, VP of Product at Coinbase.

  • What’s something that would only happen here but wouldn’t at other organizations? “The culture of a workplace — an organization’s values, norms and practices — has a huge impact on our happiness and success,” says Adam Grant.

  • What area of the business would you say this company is behind on, given its stage? “This question can often highlight functions that are not established and areas where you have to fill in cross-functionally that might surprise you,” says Cristina Cordova, Head of Platform and Partnerships at Notion.

  • Can you tell me about your founding team’s background and why you’re tackling this particular problem? “More job candidates should think like an investor. After all, joining a company is one of the biggest investments one can make,” says Ryan Hoover, Founder of Product Hunt.

  • How would your team describe you? “What’s your management style?” is an all-too-common question, more likely to elicit platitudes than nuggets of wisdom. “Framing it from the perspective of the reports prompts the manager to think beyond their intent and instead consider their actual working relationships with the team,” says Zainab Ghadiyali (alum of Airbnb and Facebook).

  • Can I see your calendar for the week? “I believe there’s truth in calendars. If someone tells you in an interview that they really care about the learning, development and mentorship of their employees, their calendar should reflect that,” says Anna Binder, Head of People Operations at Asana.

READ MORE >>>> HERE


FAANGM market cap vs the S&P 500 performance

FAANGM vs S&P 500

Summary

  • The tech-related FAANGM stocks have continued to outperform, and account for 20% US market cap, a doubling in only five years ago. This has been a critical market driver.
  • They now trade at twice the market valuation, and the premium has never been bigger. We argue this is more than justified, and these stocks will only be stronger post-crisis.
  • They have more than twice the margins, profitability, and growth of market. Are net cash, globally diversified, and the crisis accelerating tech adoption, reducing regulatory risk, and cutting competition.

FANG
An acronym that originally referred to Facebook, Apple, Netflix and Google and the leadership that these four stocks had provided to market indexes. At Commerce Trust, we expanded the group to six companies, adding Amazon and Microsoft for an even longer acronym, FAANGM

The S&P 500
A market capitalization-weighted index of the 500 largest publicly traded U.S. companies. A company’s market capitalization is calculated as its current stock price multiplied by its total number of outstanding shares. Market caps change over time, with movements determined by daily stock price fluctuations, the issuance of new stock, or the repurchase of existing shares (also known as share buybacks).

 


Celebrating visionary entrepreneur Tony Hsieh

Tony Hsieh

Former Zappos CEO & Visionary, 1973-2020

Tony Hsieh — Tony Hsieh (/ˈʃeɪ/ shay, Taiwanese; December 12, 1973 – November 27, 2020) was an American Internet entrepreneur and venture capitalist. He retired as the CEO of the online shoe and clothing company Zappos in August 2020 after 21 years. Prior to joining Zappos, Hsieh co-founded the Internet advertising network LinkExchange, which he sold to Microsoft in 1998 for $265 million

Net worth: US$ 840 million. Known for: CEO of Zappos
Born: December 12, 1973 (age 46); Illinois‎, US‎. Alma mater: Harvard University (BS)‎

Let’s fall down the rabbit hole, together. Let’s choose our own adventure and follow our own bliss in this thing we call life. Let’s create a better world, together. Let’s imagine.
Our Goal = ICEE  Inspire  Connect. Educate. Entertain - Tony Hsieh

 

Sad times for the world and all fellow entrepreneurs. Tony Hsieh was one of the most remarkable, successful, and humble human beings I have ever meet. I am blessed to have been able to have him touch my life and have fun bending the conventional legacy business rules with him of what a CEO should do and be.

We were both early adopters of social media and Twitter as a way to be open, transparent, approachable, and connected to our industry, employees, and customers. We talked about and Tweeted back at Business Week and other publications that called us out. Saying CEOs should not be on social media. It was a waste of time, etc etc. We both ademantly believed and Tweeted back that those that were not would become irrelevant as leaders and out of touch with their customers, and that transparent openness equaled trust. "Trust" being the new currency along with culture and core values as the foundation of innovative companies. Years later those same publications were touting the power of the social enterprise and all execs need to embrace social. Funny to think about that now. Tony was always bending the rules.

One last thought on that front was when I emailed him about a joint marketing collaboration and I received a Jira ticket back with the Zappos marketing team. Jira ticketing at that time was an "engineering only ticketing system". We immediately adopted Jira across the entire company. Which made us significantly more efficient and accountable from a task management perspective that is now managed using tools like Asana.

The world seems a bit small as I magine all the amazing things he would have done to impact humanity. Which was his next mission and part of his entrepreneurial journey in his post Zaposs life. We will never know.

Today, we are saddened to share the news of Tony Hsieh’s passing. We can only imagine what he would say if he were here to announce this to you all, but we envision his message would resonate that:

Energy cannot be created or destroyed.
Energy is the ability to bring about change.

Tony has given energy to so many people. For those of you who knew him well, you knew of his childlike wonder; his love for experiences and relationships over material things. Let us all feel Tony’s energy and use it to deliver happiness.

It is with very heavy hearts that we are sharing some very sad news with all of you, as we have learned that Tony passed away earlier today (11-27-20). Though Tony retired this past summer, we know what a tremendous impact he has had on both Zappos and on Zapponians, as he has dedicated the past 20 years focusing on the success of both the company and our employees.

The world has lost a tremendous visionary and an incredible human being. We recognize that not only have we lost our inspiring former leader, but many of you have also lost a mentor and a friend. Tony played such an integral part in helping create the thriving Zappos business we have today, along with his passion for helping to support and drive our company culture.

Tony’s kindness and generosity touched the lives of everyone around him, as his mantra was of “Delivering Happiness” to others. His spirit will forever be a part of Zappos, and we will continue to honor his memory by dedicating ourselves to continuing the work he was so passionate about.

We will be working on ways to celebrate Tony’s extraordinary life in the coming days. In the meantime, we invite you to share your memories of the ways he brightened your life - you can send them to CelebratingTony@zappos.com and we will share them with his family.

Our thoughts remain with him and his loved ones. Zappos is a family, and we will continue to hold Tony close in our hearts. - Kedar Deshpande Zappos CEO

During his tenure at Zappos, Hsieh helped the company become one of the largest online shoe stores in the world. And in 2009, he helped ink Amazon's $1.2 billion purchase of the company. Prior to joining Zappos in 1999, when it was still called ShoeSite.com, Hsieh had founded an online ad company called LinkExchange, which he sold to Microsoft for $265 million in 1998.

Zappos's philosophy has long been "We don't sell shoes, we sell customer service," and its No. 1 core value is "Deliver WOW through service." For well over a decade, employees have authored Zappos's annual Culture Book, where Zapponians--as they're called internally--say in a few paragraphs what the company means to them. With about 1,500 employees, not everything makes it into the book, but it's brimming with photos of happy employee outings, aphorisms, and cheerful wishes.

Hsieh's tenure at Zappos was not without problems. Its experiment with holacracy--a decentralized system meant to distribute decision-making throughout the organization--is today largely seen as a bust. Around 18 percent of the staff left the company after Hsieh in 2014 first ordered that Zappos would no longer employ "people managers," and the company has been quietly backing away from the structure in recent years.

Separately, he has described losing $100 million over the course of Zappos's history, just from hiring mistakes. "Especially [true] amongst startups and entrepreneurs," he told Inc. in 2012. "There's a temptation to just get warm bodies in and hire as fast as possible. And then just by human nature when firing people, most people just drag their feet. What we learned is instead of trying hire quickly and fire slowly really it should be the reverse: we should hire slowly and fire quickly when it's not the right fit."

Despite that financial success, Hsieh's biggest impact on the world of business will likely revolve around his efforts to elevate customer service and company culture--to the point where his ideas are no longer novel but normal.

His corporate culture book/autobiography, Delivering Happiness, debuted at No. 1 on the New York Times bestseller list in 2010, and remains a foundational tome for entrepreneurs. In 2009, Zappos launched Zappos Insights, a consulting firm that helps other businesses fine-tune their own company cultures.

I was fortunate to have been able to meet Tony at the Inc 500 awards and see his "Delivering Happiness" keynote. Which is a timeless presentation based on principles that changed the way we approached our corporate culture as a marketing asset that dramatically impacted our growth and ability to build the MediaTrust brand into the 9th fastest growing company in the United States. Every company, startup, entrepreneur, and executive needs to understand and embrace these principles, and the power of culture as an important element in the stack of an organization.

The 4 core principles of delivering happiness are:

1. Find your one true passion and don't follow the money

2. Hire the right people, have the right company culture, and the rest will develop

3. Surprise your customers and show them how much you care

4. Make learning a priority for yourself and staff

 

His impact on e-commerce, the startup community, and entrepreneurship will remain indelible. Delivering happiness was always his mantra. So instead of mourning his transition, we should be celebrating his life.

I will leave you with this shared memory.


VC fundraising hits record $69B in 2020 with a16z closing 2 mega-funds

Andreessen Horowitz has helped the US VC industry set a new annual fundraising record—$69.1 billion year-to-date—after the firm closed two funds at a combined $4.5 billion.

a16z closes two mega-funds at the end of 2020
a16z Website | Portfolio | Twitter | Podcast

Mega-funds of $1 billion or more are making up a growing share of the VC landscape, highlighting a disparity between established investors and those raising capital for the first time.

US venture capital funds have raised a combined $69.1 billion in 2020, edging past a 2018 record and defying the odds amid a pandemic-rattled economy. The high-water mark was set after Andreessen Horowitz announced a pair of mega-funds with $4.5 billion in commitments Friday.

The news reinforces the dominant theme of fundraising in 2020: Big investors have gotten bigger while smaller firms have struggled. The 2020 year-to-date fundraising total was set by just 287 funds, compared with 589 funds in 2018 >>> READ MORE ON PITCHBOOK


Elon Musk Fireside Chat "kept it simple, kept it honest & kept it real"

https://www.youtube.com/watch?v=HPV8Xp3pEpI&feature=emb_logo

Genius Turner

Article by Genius Turner  for Entrepreneurs HANDBOOK

During a Q&A session of the Satellite 2020 conference, Elon Musk — the college dropout who ditched Stanford to roll the dice on his first start-up — was asked to share a few thoughts on how to make college more affordable.

Though I expected an answer long and sour, Musk kept it short and sweet:

“You don’t need college to learn stuff!”

Musk then noted that given we live in the Information Age — knowledge is essentially free.

Unlike the Dark Ages when Encyclopedists had to all but smuggle information as if they were bootlegging for Al Capone, Millennials, and Gen Zers live in an age where info is but a click away.

In short, as Musk noted, we live in an age where the food for thought is served at an all-you-can-eat buffet.

As far as “stuffed” goes, Musk roasted colleges for being stuffed with “annoying homework assignments. […] I think colleges are basically for fun and to prove you can do your chores, but they’re not for learning.”

The crowd roared with applause... READ MORE


Airbnb lines up public IPO filing for 2020 debut

Airbnb plans to make a public IPO filing next week, putting it on course for a New York stock market debut in December, according to a Reuters report on Thursday citing two people familiar with the matter. The hospitality unicorn’s planned debut is set to be one of the largest U.S. stock market listings of 2020.

Airbnb reportedly plans to set an IPO price range and launch an investor roadshow in December, subject to market conditions. Previously, it’s been reported that the company is seeking to raise around $3 billion in its public offering, with a likely initial valuation of more than $30 billion.

The company has raised at least $6.4 billion from investors including Andreessen HorowitzSequoia Capital and General Atlantic. It was last valued at around $18 billion after a $1 billion private equity round in April. That’s down from the some $26 billion Airbnb was valued at in early March, according to Reuters, before the COVID-19 pandemic took hold. The company has grown to include over 7 million listings across more than 220 countries and regions around the world.

 


How C-Suite compensation has been affected by COVID

How hard has Covid hit C-Suite pay? This week we have some answers. In our just-released 2020-21 CEO & Senior Executive Compensation Report for Private Companies—the largest annual survey of its kind in the U.S.—we dug into the immediate impacts of Covid on leadership pay.

Today we’ll focus on the hit to CEO comp, but our research division has plenty more data on virtually every other title as well, across every company size and industry. When it comes to CEO pay, we found:

  • Some 37 percent of private companies in the U.S. reduced their CEO’s base salary in 2020 in response to the crisis—the majority of which report cuts of 10 percent to 30 percent.
  • As a result of the crisis response, median CEO cash compensation for 2020 is expected to decrease by 15 percent: a 5 percent cut to base salary and 60 percent to bonus awards.
  • Of those companies cutting their CEOs’ base salary in 2020, the majority were doing so for at least three months
  • Some 45 percent say the reductions will either remain in place until the end of the year or until such time when the company is profitable again.
  • Nearly 70 percent of companies in the restaurant industry slashed CEO pay. But media CEOs were hit even more often—and advertising/marketing and entertainment industry chiefs were cut almost as often.
  • Financial services, biotech, pharma and construction leaders were the least impacted, our survey found.

To succeed in a post-Covid environment, companies will need to be proactive with their pay strategy, rather than reacting—often too late—after top talent walks out the door. Hopefully we can help. Read the Full Story >


Meet 2048 Ventures newest partner Neha Khera

2048 Ventures announced the latest addition to the 2048 Ventures team.

FOLLOW 2048 VC on LinkedIn

The team first met Neha Khera, through the Canadian startup ecosystem. They started collaborating closely and quickly learned that she was a force to be reckoned with. Her combination of aptitude, humility, and passion for founders at the earliest stage is unparalleled. 2048 is lucky to now call Neha a good friend, a great collaborator, and now, their newest Partner.

Neha has a wealth of experience at the earliest stage. Most recently, she was with 500 Startups, first helping to launch 500's Canada Fund and then investing out of 500's flagship fund. Prior to 500 Startups, Neha began her career in venture with MaRS IAF, an early stage fund which is part of the largest innovation center in Toronto.

As many of you know, 2048 loves the Canadian startup ecosystem. To date, they've backed several incredible teams from Canada, including: BioBox, Konvrs, nplex, Ratio.city, and Turbodega. Neha will help us double down our pre-seed efforts in Canada, and 2048 couldn't be more excited.

You can email Neha at neha@2048.vc, see Neha’s investments on AngelList, see her connections on LinkedIn, or follow her on Twitter @naykhera.

Please join us in welcoming Neha to the 2048 Ventures team!


8 Key CEO Attributes to Look for in 2020 and Beyond

Past performance is the greatest indicator of future performance

Look for a CEO who has previously led successful turnarounds. Within those turnarounds, closely evaluate the financial outcome of the business (s)he led to make sure the turnaround was due to more than just timing and broader market conditions.

Team builder

Given this person will often change the make-up of the executive team, (s)he will also have to make new executive hires and re-energize the existing team. Find out if this CEO has hired successfully in the past and look to see if his or her team has followed them from one company to the next. A turnaround CEO must be able to quickly get buy-in on the turnaround strategy from the executive team and the board.

While the CEO’s leadership abilities are obviously key, a successful turnaround can’t happen without strong leadership at all levels of an organization. Considering time is truly of the essence, leaders need to mobilize their organizations quickly. Empowering your team and being decisive is critical.

This brings us back to the concept of board focus and engagement in order to make a successful selection, i.e. deciding what matters most. For example, a board may be strongly aligned to the current strategy of the business and resolved that performance issues are driven by operational leadership  weakness. Or it may be viewed that the business has reasonable financial leeway but that real future success will be in new growth strategies, including M&A. So the board’s collective view of the business opportunity and the accessible resources is obviously central, and may define different CEO skill focus.

As with most things leadership, what gets recognized and well communicated becomes a tool – and what isn’t recognized and communicated becomes the real threat.

A realist with open and transparent communication style

This person must have the ability to confront the uncomfortable. Once (s)he has distilled down the business challenges, (s)he needs to be able to communicate those problems to the team and create a realistic transformation story that everyone can understand.

During a CEO search for a troubled company, our private equity client was taken aback by the candidate’s directness voicing her concerns about the company’s strategic direction as well as its operational footprint. Ultimately, though, they realized this sort of candor was exactly what they were lacking.

Also, ask the candidate what mistakes (s)he has made in the past and in retrospect how they would do things differently. If the candidate is not self-aware enough to take ownership of past mistakes, (s)he will not have the transparency needed for a turnaround. Having the ability to acknowledge missteps and know how to correct them is key.

A highly strategic problem solver

Strong turnaround CEOs have the ability to quickly digest information and data and distill the underlying issues in the business. Once you’re far enough along in the interview process, let candidates review the financials and the board documents. Observe what questions they ask.

Look closely at their previous leadership roles and understand how they identified and prioritized problems and came up with a new strategic plan for the business. You don’t want a candidate who is only capable of solving operational issues, which is only one aspect of the turnaround. You also need someone with a demonstrated ability to create a new strategy for growth with a very specific timetable around tactics and execution.

On a recent CEO search for a distressed private equity-backed company, for example, our finalist stood out because he had previous successful turnaround experience. More importantly, though, he had demonstrated success shifting market focus from a troubled sector – in this case energy – into new higher growth markets.

Understands the importance of cash and cash management

Cash management is not just the responsibility of the CFO. Strong turnaround CEOs who have been through challenging times understand the importance of cash management and banking relationships. They should be focused on the numbers every day.

Operationally minded

This is turnaround 101, but these CEO candidates must be operationally minded. They will have to first find the low hanging fruit in immediate operational and financial improvement opportunities. And while they have to see the big picture, they must also be data-driven, with a focus on the details.

Strong sense of urgency

You want to look for a CEO who is decisive and moves quickly. Time is absolutely of the essence in turnaround situations so the ability to drive decisions at a rapid clip is critical.

A track record of making tough choices

This person will likely need to quickly make dramatic changes to the leadership team in order to ensure the turnaround plan can be successful. Moving away from legacy business models and/or processes may also be necessary.