The goal of a private company is, first, zero to one. Get past the product market fit, figure out whether people actually care about what you're trying to build and someone will pay you money for that. That's the zero to one problem. So scaling, one through N, is figuring out can you do that at scale and how big is the scale. And when people pay you more than what it costs for you to make it, does that equation end up leaving you with money left over, i.e. profits.
Chamath PalihapitiyaI think unfortunately in this gold rush mentality that we've been in for the last years there has been not enough focus on business model quality. So when push comes to shove, there actually aren't that many great businesses that can go public. Because I think if you're going to thrive as a public company, it presupposes that you make more money than you spend.
Chamath PalihapitiyaThe half-life of companies is shrinking. So in the same ease in which you can start a company today to disrupt an incumbent, you have to also realize that somebody will do that to you as well just as easily. So if you're not just going to get on top but stay on top, that will require a real prepared mind across many companies.
Chamath PalihapitiyaIf you're trying to get to profitability by lowering costs as a startup then you are in a very precarious and difficult position. You need to grow through profitability.
Chamath PalihapitiyaI think going public should not be a goal and the more that we make it a goal, the less it will be a goal. It's kind of like, I have three young children and when I tell them to eat vegetables, the last thing they will ever do is eat vegetables. I think it's just this weird thing where entrepreneurs have a reflexive negative reaction when people are pushing for it. I think you have to view going public for what it is, which is a transitional moment where you can consolidate mindshare and win at an even larger scale.
Chamath PalihapitiyaIf you look at the ecosystem, entrepreneurs as a class have gotten younger, younger, and younger. They also as a class have become less and less and less experienced. The good part about that is that you're unlocking this ability to start a company to so many more people. That's an amazing positive. The negative is they're coming to that job with dramatically less experience than they've ever had. So there needs to be someone around the table that can then help them.
Chamath PalihapitiyaIt's OK, by the way, that it takes 10 years for you to make "money." Since when was it that being in your mid-30s to make a few hundred thousand dollars or a million dollars was like egregiously unfair? I think we have to have a sense of perspective here. We're all going to live into our 80s or 90s. So what is everybody in such a rush for?
Chamath Palihapitiya