10 ms·

What went wrong at Social Capital

185 points by kaboro 8y ago

anilshanbhag 8y ago
Axios style of reporting is unique. Their articles are concise with clear paragraphs and bulleted points. It is welcome change and I wish more sites adopt a similar approach.
- chickenfries 8y ago
  I like it too, but the use of bolding is a bit excessive and distracting. I feel like it makes sense sometimes, but then other times it feels random, like the bolding of > By early June, Axios heard that Tony Bates and Marc Mezvinsky > But even the core business I feel like if they want to do this bolding to enable skimming, they should bold entire independent clauses.
- huntermeyer 8y ago
  I agree. It is a refreshing, easy to digest format. I hadn't really noticed until you mentioned it. Which is a testament to good design :)
- burlesona 8y ago
  I agree, it was great to read their “about” page - though ironically a tad verbose haha: https://www.axios.com/about https://www.axios.com/about
- pmart123 8y ago
  Wow, you're right. I just noticed that. It's like the Skimm for men.
jpeg_hero 8y ago
And leadership at portfolio companies want to comment? If a VC leads your round and then goes radio silent it can really hurt the company.
- mathattack 8y ago
  Many execs appreciate the freedom. Some VCs have great advice, but not all are helpful.
  - stanleydrew 8y ago
    Freedom from constant meddling is appreciated. Not having your lead investor cheerlead for you externally is not great signaling though.
deleted 8y ago
[deleted]
seibelj 8y ago
What is it with executives who feel above showing up to work? I worked at a company where the CEO worked 2 half days a week and the other execs were on cruise control, then they got angry that all the employees weren’t killing it (“this is startup! Work like one!”). Hard to enforce that culture when no one is ever there.
- pjc50 8y ago
  > "Palihapitiya in February filed for divorce from his wife Brigette Lau, a partner with Social Capital and co-owner of its management company. Soon he began showing up less often to the office, ..." The disadvantage to not having a boundary between your personal life and work life, I suppose.
  - smt88 8y ago
    What are the advantages? Seems like a terrible idea all around.
    - YinglingLight 8y ago
      An incredible amount of small businesses have female owners to due tax benefits. So husband-wife pairs are not uncommon.
      - somebodythere 8y ago
        What are the tax benefits?
        dx87 8y ago
        I don't know about tax benefits, but I know it is pretty common around DC for a husband to have his wife be the legal owner of his business for contract bidding purposes. The govt has to award a certain amount of contracts per year to smaller groups, so making the wife the owner allows the business to legally be a "woman owned, small business", even though the wife has no actual role in the company.
benwerd 8y ago
Anecdotally, I'd say that the issues outlined here led to an even worse problem: the experience of founders pitching to them was poor.
- mathattack 8y ago
  Interesting. My only data point is a founder who said they were very hands off post-investment.
- doosey2 8y ago
  Any details?
bruceb 8y ago
hired: "Wall Street veteran Marc Mezvinsky (husband to Chelsea Clinton) as vice chairman." who had already lost a bunch of money on Greece and enjoys skiing. An example of failing upwards. Same with Chelsea Clinton who seems like a decently intelligent, nice person, who has had to put up with lots of ugly attacks...but who has had positions handed to her, not unlike other connected kids of Washington/NYC elite. Not people you want in SV if you are assessing tech startups. Now pulling off a BioTech scam? Then yes.
- whatok 8y ago
  Semi-related but all I remember the founder for is pitching TSLA converts at Ira Sohn and just thinking, "I don't think people go to this to hear TSLA pitches..."
imh 8y ago
>Sources said they had come to believe that Palihapitiya was no longer putting the firm first in his life This guy's bad behavior aside, that's a ridiculous bar to hold someone to. Sounds like he hardly cared at all.
- fastball 8y ago
  It's a ridiculous bar for many jobs. But "head of a billion dollar VC firm" is not really a position that allows for much work-life balance.
  - ryandrake 8y ago
    > But "head of a billion dollar VC firm" is not really a position that allows for much work-life balance. Maybe playing devil's advocate a little, but why not? I admittedly don't know what a "head of a billion dollar VC firm" does all day, but what critical business actually won't get done because he takes 2 hours to go to his kid's little league game?
    - EpicEng 8y ago
      >what critical business actually won't get done because he takes 2 hours to go to his kid's little league game? Who said that was the issue? I imagine it was a pattern, not a one off life event.
    - huac 8y ago
      jetting with his new girlfriend to Italy for weeks at a time != taking 2 hours to go to his kid's little league game
- EpicEng 8y ago
  >that's a ridiculous bar to hold someone to "The bar" moves around depending on position. Sure, it's ridiculous to expect a secretary to put the company above all else, but the CEO? A high ranking government official? The head of a high profile medical department? Not so ridiculous at all.
abakker 8y ago
"Maidenberg was frustrated by Palihapitiya's push to prioritize data in the VC investment process, which is traditionally based on a more high-touch, personal approach." I think that is a telling line. There are certain decisions that can be improved with data, and many others where data can be your only criteria, but, in business, there are also a whole class of problems where data is basically a pipe dream. Don't get me wrong, I am not saying that wanting to make decisions with data is wrong, but, there is a lot of what goes into an investment that is "unknowable" in the sense that your "data" is very sparse or anecdotal, or, you simply have more unknown unknowns. It is this fact that causes many VCs to invest in good teams, that they feel will be able to handle the uncertainty, rather than investing in purely data backed opportunities.
- subway 8y ago
  Remember when the stock market was considered an art, dependent on your ability to make a deal? I'm sure a lot of those folks insisted the quants would never eat their lunch, because the data is a pipe dream.
  - abakker 8y ago
    Personally, no, I don't remember that, but, I know it did exist. I'm also not saying that data won't ever exist. but, the stock market, as a market, produces the data needed for the quant funds. there is enough "price information" in the market to generate the data that a quant fund needs within the market itself. OTOH, startups are opaque, and most of the relevant data is kept out of the the hands of anyone that might aggregate it. instrumentation of the startup market does not benefit people the way that trading on existing data streams benefits the public ones. Again, not saying don't try to get more data, but, given the status quo, it is not a lot of data to go on right now.
  - cirgue 8y ago
    Even the people saying the stock market was an art assumed you already had the data. Quants didn't master data, they mastered latency.
- not_that_noob 8y ago
paulcnichols 8y ago
Businesses fail and life goes on.
- tw1010 8y ago
  You shouldn't be sad by articles like this, but it can prove a valuable lesson for why things actually fail in practice (rather than in theory), which is why you shouldn't ignore it.
village-idiot 8y ago
I still don't understand why this matters.
kaboro 8y ago
https://twitter.com/chamath/status/1038096940372619264 https://twitter.com/chamath/status/1038096940372619264
rossdavidh 8y ago
Purely hypothetical idea I just made up, just throwing it up here as a trial balloon: maybe the reason this VC exec (and others working for him) actually got disinterested, is that they don't see many good opportunities for investment appearing. Which would mean the real reason they are winding things down because they think the bubble is popping soon. No idea if it's true, just putting it up for comment.
- paxys 8y ago
  You would read the same article about every VC firm then
megadethz 8y ago
He also owns 25,000 bitcoins. Made a huge bet in the space. ref: https://www.cnbc.com/2017/12/05/winklevoss-twins-head-the-list-of-people-getting-very-rich-from-bitcoin.html https://www.cnbc.com/2017/12/05/winklevoss-twins-head-the-li...
owens99 8y ago
Title doesn't make sense to me. Sounds like Chamath is retiring because he's made a ton of money. Though his style of communication is clearly horrible.

185 points by kaboro 8y ago

Axios style of reporting is unique. Their articles are concise with clear paragraphs and bulleted points. It is welcome change and I wish more sites adopt a similar approach.

chickenfries 8y ago
I like it too, but the use of bolding is a bit excessive and distracting. I feel like it makes sense sometimes, but then other times it feels random, like the bolding of > By early June, Axios heard that Tony Bates and Marc Mezvinsky > But even the core business I feel like if they want to do this bolding to enable skimming, they should bold entire independent clauses.
huntermeyer 8y ago
I agree. It is a refreshing, easy to digest format. I hadn't really noticed until you mentioned it. Which is a testament to good design :)
burlesona 8y ago
I agree, it was great to read their “about” page - though ironically a tad verbose haha: https://www.axios.com/about https://www.axios.com/about
pmart123 8y ago
Wow, you're right. I just noticed that. It's like the Skimm for men.

jpeg_hero 8y ago

And leadership at portfolio companies want to comment? If a VC leads your round and then goes radio silent it can really hurt the company.

mathattack 8y ago
Many execs appreciate the freedom. Some VCs have great advice, but not all are helpful.
- stanleydrew 8y ago
  Freedom from constant meddling is appreciated. Not having your lead investor cheerlead for you externally is not great signaling though.

deleted 8y ago

[deleted]

seibelj 8y ago

What is it with executives who feel above showing up to work? I worked at a company where the CEO worked 2 half days a week and the other execs were on cruise control, then they got angry that all the employees weren’t killing it (“this is startup! Work like one!”). Hard to enforce that culture when no one is ever there.

pjc50 8y ago
> "Palihapitiya in February filed for divorce from his wife Brigette Lau, a partner with Social Capital and co-owner of its management company. Soon he began showing up less often to the office, ..." The disadvantage to not having a boundary between your personal life and work life, I suppose.
- smt88 8y ago
  What are the advantages? Seems like a terrible idea all around.
  - YinglingLight 8y ago
    An incredible amount of small businesses have female owners to due tax benefits. So husband-wife pairs are not uncommon.
    - somebodythere 8y ago
      What are the tax benefits?
      - dx87 8y ago
        I don't know about tax benefits, but I know it is pretty common around DC for a husband to have his wife be the legal owner of his business for contract bidding purposes. The govt has to award a certain amount of contracts per year to smaller groups, so making the wife the owner allows the business to legally be a "woman owned, small business", even though the wife has no actual role in the company.

benwerd 8y ago

Anecdotally, I'd say that the issues outlined here led to an even worse problem: the experience of founders pitching to them was poor.

mathattack 8y ago
Interesting. My only data point is a founder who said they were very hands off post-investment.
doosey2 8y ago
Any details?

bruceb 8y ago

hired: "Wall Street veteran Marc Mezvinsky (husband to Chelsea Clinton) as vice chairman." who had already lost a bunch of money on Greece and enjoys skiing. An example of failing upwards. Same with Chelsea Clinton who seems like a decently intelligent, nice person, who has had to put up with lots of ugly attacks...but who has had positions handed to her, not unlike other connected kids of Washington/NYC elite. Not people you want in SV if you are assessing tech startups. Now pulling off a BioTech scam? Then yes.

whatok 8y ago
Semi-related but all I remember the founder for is pitching TSLA converts at Ira Sohn and just thinking, "I don't think people go to this to hear TSLA pitches..."

imh 8y ago

>Sources said they had come to believe that Palihapitiya was no longer putting the firm first in his life This guy's bad behavior aside, that's a ridiculous bar to hold someone to. Sounds like he hardly cared at all.

fastball 8y ago
It's a ridiculous bar for many jobs. But "head of a billion dollar VC firm" is not really a position that allows for much work-life balance.
- ryandrake 8y ago
  > But "head of a billion dollar VC firm" is not really a position that allows for much work-life balance. Maybe playing devil's advocate a little, but why not? I admittedly don't know what a "head of a billion dollar VC firm" does all day, but what critical business actually won't get done because he takes 2 hours to go to his kid's little league game?
  - EpicEng 8y ago
    >what critical business actually won't get done because he takes 2 hours to go to his kid's little league game? Who said that was the issue? I imagine it was a pattern, not a one off life event.
  - huac 8y ago
    jetting with his new girlfriend to Italy for weeks at a time != taking 2 hours to go to his kid's little league game
EpicEng 8y ago
>that's a ridiculous bar to hold someone to "The bar" moves around depending on position. Sure, it's ridiculous to expect a secretary to put the company above all else, but the CEO? A high ranking government official? The head of a high profile medical department? Not so ridiculous at all.

abakker 8y ago

"Maidenberg was frustrated by Palihapitiya's push to prioritize data in the VC investment process, which is traditionally based on a more high-touch, personal approach." I think that is a telling line. There are certain decisions that can be improved with data, and many others where data can be your only criteria, but, in business, there are also a whole class of problems where data is basically a pipe dream. Don't get me wrong, I am not saying that wanting to make decisions with data is wrong, but, there is a lot of what goes into an investment that is "unknowable" in the sense that your "data" is very sparse or anecdotal, or, you simply have more unknown unknowns. It is this fact that causes many VCs to invest in good teams, that they feel will be able to handle the uncertainty, rather than investing in purely data backed opportunities.

subway 8y ago
Remember when the stock market was considered an art, dependent on your ability to make a deal? I'm sure a lot of those folks insisted the quants would never eat their lunch, because the data is a pipe dream.
- abakker 8y ago
  Personally, no, I don't remember that, but, I know it did exist. I'm also not saying that data won't ever exist. but, the stock market, as a market, produces the data needed for the quant funds. there is enough "price information" in the market to generate the data that a quant fund needs within the market itself. OTOH, startups are opaque, and most of the relevant data is kept out of the the hands of anyone that might aggregate it. instrumentation of the startup market does not benefit people the way that trading on existing data streams benefits the public ones. Again, not saying don't try to get more data, but, given the status quo, it is not a lot of data to go on right now.
- cirgue 8y ago
  Even the people saying the stock market was an art assumed you already had the data. Quants didn't master data, they mastered latency.
not_that_noob 8y ago

paulcnichols 8y ago

Businesses fail and life goes on.

tw1010 8y ago
You shouldn't be sad by articles like this, but it can prove a valuable lesson for why things actually fail in practice (rather than in theory), which is why you shouldn't ignore it.

village-idiot 8y ago

I still don't understand why this matters.

kaboro 8y ago

https://twitter.com/chamath/status/1038096940372619264 https://twitter.com/chamath/status/1038096940372619264

rossdavidh 8y ago

Purely hypothetical idea I just made up, just throwing it up here as a trial balloon: maybe the reason this VC exec (and others working for him) actually got disinterested, is that they don't see many good opportunities for investment appearing. Which would mean the real reason they are winding things down because they think the bubble is popping soon. No idea if it's true, just putting it up for comment.

paxys 8y ago
You would read the same article about every VC firm then

megadethz 8y ago

He also owns 25,000 bitcoins. Made a huge bet in the space. ref: https://www.cnbc.com/2017/12/05/winklevoss-twins-head-the-list-of-people-getting-very-rich-from-bitcoin.html https://www.cnbc.com/2017/12/05/winklevoss-twins-head-the-li...

owens99 8y ago

Title doesn't make sense to me. Sounds like Chamath is retiring because he's made a ton of money. Though his style of communication is clearly horrible.