It'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 PalihapitiyaI think the reality is that it's never been a better time to be an entrepreneur, it's never been a better time to work at a startup. You work at a really intellectually free environment, you get to work with people who are like-minded, it's very energetic. It's wonderful.
Chamath PalihapitiyaThe entrepreneurial struggle is the same at basically every stage in the sense that there's maybe slightly less risk but strategic issues are generally always the same. Now there's so much existential risk from another company either being able to compete or to disrupt you in the same way you're disrupting somebody else, an entrepreneur needs a real steady partner who has the ability to start working with them in the Seed or the A and be credible and value-add with strategic advice, and just be backstopped by so much capital that you can do any growth round or even a public round.
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 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 PalihapitiyaThe 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 PalihapitiyaThe reason to go public is that it is a massive branding, marketing, credibility, trust-building exercise with your customers, and then it allows you to consolidate power and scale and market share. Do we want to be a huge company with a huge impact? If the answer to that is yes, the only way that that happens is by going public. It is effectively a branding event that catalyzes interest. It helps with recruiting, it helps with marketing, it helps with sales. It just helps on many dimensions. I think it's basically a litmus test for the CEO's ambition.
Chamath Palihapitiya