Jonathan Hsu, lead data scientist at Social+Capital, discusses the firm's $1B under management and $600M fund split between enterprise software like Slack and mission-driven areas in education and healthcare. He highlights their growth team's experiment-driven approach, citing payment dongles in India as an example of finding social-impact opportunities.
My question is, can you tell me— tell us a little bit more—
About us? Sure, yeah, absolutely. We invested in Sprig, which is a competitor, I suppose.
OK.
Yeah, so sure, sure. The Social Capital Partnership. So our fund, we right now have about $1 billion under management. We just raised the most recent fund at about $600 million this past year in the spring. Our portfolio is about half enterprise companies. We invested in Slack. We invested in Intercom, a bunch of these types of companies. So about half of the investment dollars are in enterprise companies. The other half are attacking what we believe are sort of large, open areas, healthcare, financial services, education. And now we've started doing a little bit of consumer, of which Sprig is a good example. In terms of what it is that we're looking for, I mean, it's an interesting question. In some sense, we're looking for the same thing everybody's looking for, like great founders who have great ideas and who are really passionate about it. Everybody's going to give you that same pitch. So really what you want to hear is, how are you different from the other guys? The main difference between us and other guys is probably the existence of the growth team. So one component of our model is that if you are a company that is doing really well, you're going to have your choice of investors. You're going to be able to pick. Take this guy's money, that guy's money. Money is money. It's going to help you grow. But the thing is that you should really be looking for investors who are aligned with what you're trying to do and who will be able to add value to whatever it is that you're trying to achieve. In the case of Social Capital, we have a growth team, which is myself and a couple other guys who I've worked with for a while, who have expertise in growth, the data science aspect. There's also a paid acquisition marketing aspect to it. There's this whole discipline of growth product management, and we've really built out that capacity internally, largely because that's what Chamath did at Facebook. Chamath started the growth team at Facebook. This is what makes us us, is having this very fine lens on the world. We tend to gravitate towards, and people tend to gravitate towards us, who are oriented that way. People who are very quantitatively oriented, and who are willing to sort of test the boundaries of what is possible in order to achieve really big things. I would say that that's probably the differentiator.
What about the social part of the business? What's the company's view on that?
Well, it's an interesting question. It's an interesting question. I think that if you look at those other 3 areas, so I said that our portfolio has This SaaS component.
Mm-hmm.
And in some sense, we use that to finance this other stuff. This other stuff is what we believe of as our social component, right? We're looking for entrepreneurs who are trying to make big things happen in education, right? Education is this ginormous space where all of this technological change in the last 10 years hasn't really affected them, right? If you look at how you interact with your phone right now, it's crazy, right? Think about what you were doing 5 years ago. You guys were all in high school probably, so you don't even remember. But it was very different, right? But if you look at how a teacher works in an elementary school and you compare it to what they were doing 5 years ago, it's the same, right? There's been no change. And it's more or less the same thing in healthcare, right? Healthcare technology has moved very slowly. If you look at the software that they use in hospitals, it's more or less what you had as a consumer in the '90s. So it's moved really slowly. It's this giant area that clearly is important for humanity, that there's a huge scope of opportunity. And when we look at financial services, the parts of financial services that we're interested in are really the parts that are underserved, right? Like, we have a company that is making payment dongles in India, kind of like the Square reader for credit cards, right? Now, the reason why this is interesting is because in India, last year, they made 150 million bank accounts last year. It was absurd. So there's this whole country that is all of a sudden entering the financial markets. They all of a sudden have a credit card and a bank account, which means that they will want credit lines. And there's all this amazing stuff. So we have a company in there trying to do stuff like that. So when I think of the social stuff, that's how it's manifesting itself. It's manifesting itself in these areas where we believe that there are these large opportunities for us to have a huge impact on humanity, and we're looking for people to like, who are ambitious enough to try to tackle these insane things.
