San Francisco, CA-I didn’t really know what to expect when I sat down for the last panel of day 1. Chamath Palihapitaya, Founder and Managing Partner of the Social Captital Partnership, was entertaining to say the least. He jumped from topic to topic and seemed to get more excited and passionate as the discussion evolved.
Jessica Lessin, the Founder and Editor-in-Chief, started off the discussion by quoting Palihapitiya from an earlier interview of his where he said “This industry [Healthcare] is full of crappy experiences.” That introduction of sorts seemed to propel Palihapitiya into a series of stories.
One of the more telling stories he shared was about his family medical history. He explained that one of the reasons he became an advocate and investor in Healthcare was because of his father’s struggles with diabetes. A battle which his father ultimate lost. He also mentioned that 11 of his 17 aunts and uncles also had diabetes, so it was a pretty large influencer in his life.
These influences helped him sort of stumble into the business model he now uses for his company The Social Capital Partnership. Recognizing the power of data his company looked to develop and invest in low cost sensors that could calculate and more importantly influence action in chronic diseases. He admitted that at the beginning they had the wrong audience. They couldn’t seem to get people to buy the things. Switching audiences was the key. The answer was to not make the consumer pay, but gain the trust of the Payers.
The next topic introduced probably one of the more interesting of Rock Health. Palihapitiya quoted Warren Buffet in saying that “It is way better to be long term greedy than short term greedy.” This is something that he believes in very strongly and believes that the healthcare industry, as well as, Silicon Valley needs to adopt. The reason it is such a big deal because in healthcare not getting these innovative startups off the ground has an impact to lives. The direction that the industry needs to focus on is whatever improves care. The hesitation often comes from the dated metric of revenue. The problem with revenue is that it takes too long for investors. The metric we should be focusing on how many lives are saved.
The last topic was a little further into the details of his investments. He laid out the criteria that he and his partners use when deciding what to invest in. It sounds almost too straight-forward, but I can see why it works as a guiding principal. He says that they ask themselves 3 questions when deciding whether or not they should invest in a company.
- Could this reach a billion people?
- Could this make a billion dollars?
- Is there someone special behind this?
The conversation closed with the idea he believes that there is a Facebook-sized opportunity in healthcare. Probably bigger. He justified that with the statement. “The need to be alive is more valuable than all the needs beneath it.”
I can’t really argue with that.