Social Capital Hedosophia is Going to Change the VC Game, But Will It Really?

Several weeks ago, Chamath Palihapitiya did an interview with Kara Swisher on Recode/Decode that really got my attention. He was talking about how the venture capital industry was overdue for a shakeup to meet the needs of technology startups. He talked about using data science to identify investment opportunities and scale companies, similar to what he did while he was at Facebook to provide in depth services to these startups.

Further, rather than there being a ton of pressure for these companies to go scale quickly, they would have an investor that would be with them for the long term from the beginning. This sounded really interesting, particularly when he posited that this new iteration of Social Capital was going to surface founders who would typically be overlooked because of the way in which they will be looking at data.

One question that comes to mind is how would they overlooked founders get on his radar. What’s his plan to get data across a wide enough geography in order to capture these overlooked startups?

Admittedly, during Chamath’s conversation with Kara, I was unsure of what this new iteration of Social Capital would look like. Well, I got my answer a few weeks ago when Social Capital partnered up with Hedosophia to list on the New York Stock Exchange, forming Social Capital Hedosophia.

What is Social Capital Hedosophia? This is a publicly traded holding company that is designed to take unicorns public without them having to go through the traditional process of going public – roadshows, lockup period, etc.

Initially, I thought that this new model Chamath was talking about could be a game changer for startups run by black people. Perhaps, this new iteration of Social Capital could do like Chamath said and reduce the exclusion of underrepresented groups from taking the next step in building technology companies. But, I’m not sure that Hedosophia has the people it takes to address the pipeline issue.

Beyond using data science, Chamath cannot cut out the human component of how he builds out this new company. He’s got to build a team that has a global worldview that can see into the worldview of folks in Jamaica Queens, Kansas, Lagos, and Bogota. Layer the machine learning on top of that and you’re cooking with grease.

If Social Capital Hedosophia (I’m going to get carpal tunnel if they don’t come up with shorthand for this.) doesn’t do this important work, the company will just do what the rest of Silicon Valley has done, just more elegantly. Removing bias doesn’t matter if you’re pulling from the same pool of folks.

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Kwame Som-Pimpong

My name is Kwame Som-Pimpong. This is my blog. You can email me at kwame (at) afaraglobal (dot) co.

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