The Pathways & Padlocks Conversation
00:31:16 · Sachin
And that really of stood out to my personality because I'm someone that like doesn't like status quo thinking. I like creating stuff. Like moving fast and that energy of the space really stood out to me. And then further down my journey, I discovered social entrepreneurship, which was the best of both worlds, right? It was my passion for social justice and also my passion for business combining into one kind of very convenient package. And I was like, cool. And that really made me rethink the narrative about business that I kind of grew up with, and I imagine most of your audience would have grown up with, is that business is bad. It's all about money. Have social impact, you need to join a not for profit, not make the best salary, etcetera, etcetera. And I've realized now that that narrative is complete bullshit. Like one of my biggest mentors, Chamath Palihapitiya, I say mentor, but I've never met him. It's just someone I look up to. He has a fund called the social impact capital. And essentially, they invest in businesses that he thinks is going to change the world. A lot of kind of climate change tech, a lot of med tech, and he's compounded more returns than Warren Buffett. And he's going to be on track to be returning 15, 20% a year to his investors, which is absolutely phenomenal. Another kind of experience that stands out to me is I was watching an address by the chairman of the World Bank. I'm not sure if chairman's the right word, maybe it's president. But he was saying that he thinks that this frontier of business and social impact will be on the precipice of a lot of change. He gave an example of a drone company that delivers blood in Africa to remote communities via drones. And they have a viable business model and they're scaling up and they're doing so much cool stuff. And to me, that's the space that excites me the most.
00:33:07 · Sid Dissanayake
[00:33:07] S1: Yeah, 100%. And I mean, touched on it there as well, but off air you wanted to emphasize that particularly for university students, as a general principle, they come in with good intentions. They want to make an impact in the world, they're kind at heart, whatever the case may be. But I suppose what you touched on off air was that during your university experience, I guess they get impacted by a sense of realism, and there's a process of almost disillusionment along the way. So along the same lines, talked about how there's this misconception that social impact and making money aren't mutually exclusive. So I was just wondering if you'd be able to explain that a bit more, particularly for university students out there who might be listening.
00:33:58 · Sachin
[00:33:58] S0: Yeah, sure. So I'll start with that second point. So, as I mentioned before, with the Chamath example, we're at a stage in society now where solving our most important problems are also the most viable business problems, so to speak, right? I truly believe this is something that Chamath says, that the first trillionaire is going to come from solving climate change. And that's already reflected in Elon Musk. He was briefly for, I think, three or four months the richest man in the world through Tesla and SpaceX. And his fundamental purpose in starting those companies was to combat climate change, right? So I think we're living in an era where those two things aren't mutually exclusive anymore. And you can solving important societal issues, things like even like biotech, things like breast cancer, there's been a lot of innovations in that space recently. They're also financially lucrative. And I think that's awesome. I think that our smartest people should have the market incentives to go after our biggest problems and improve the biggest lives as possible. Another example I'll give, because I think this point is best kind of showing you examples, is a fund called, let me think for a second. I think it's called Leapfrog. So it's a private equity fund by a guy called Andrew Cooper. And I think when all of us business students think about private equity, they think of the evil KKR, cutting jobs, etcetera, etcetera. They're actually a social impact private equity fund. And what they've done sorry, are you going ask for question?
00:35:31 · Sid Dissanayake, Sachin
[00:35:31] S1: Yeah, no, was going to say, for those non business students, what is a private equity fund? Can you explain that? [00:35:35] S0: So private equity is an investment class where you invest in private companies, and a lot of the time you buy them out, make them more efficient, and then sell them again. So it's essentially but the reason why people sometimes can consider it evil is there's a lot of cost cutting that goes on and a lot of it's a very what's the right way of describing it? It's a very cutthroat kind of industry. Yeah. And a quick example is that a private equity firm, Bain Capital, bought Virgin Airlines when they were kind of with this COVID period. So Andy Cooper's Fund, they're a social impact private equity. And what they've done is they've bought up a few insurance companies in Africa. And in Africa, a lot of people, I think the majority of the population is uninsured because there's this informational asymmetry problem where the banks don't have enough information on the individual people to insure them, right? And so what they did is they've bought some of these companies and they've changed them up to now insure based on mobile phones. So they can track some of the data of the people on mobile phones. And through that, they've gotten hundreds of millions of people insured, which is awesome. And it's a completely viable business model. So yeah, I think we're living in an exciting time. And to come back to your first point, the first one of your question, which was about that uncertainty that you have in university and
00:35:35 · Sachin, Sid Dissanayake
[00:35:35] S0: So private equity is an investment class where you invest in private companies, and a lot of the time you buy them out, make them more efficient, and then sell them again. So it's essentially but the reason why people sometimes can consider it evil is there's a lot of cost cutting that goes on and a lot of it's a very what's the right way of describing it? It's a very cutthroat kind of industry. Yeah. And a quick example is that a private equity firm, Bain Capital, bought Virgin Airlines when they were kind of with this COVID period. So Andy Cooper's Fund, they're a social impact private equity. And what they've done is they've bought up a few insurance companies in Africa. And in Africa, a lot of people, I think the majority of the population is uninsured because there's this informational asymmetry problem where the banks don't have enough information on the individual people to insure them, right? And so what they did is they've bought some of these companies and they've changed them up to now insure based on mobile phones. So they can track some of the data of the people on mobile phones. And through that, they've gotten hundreds of millions of people insured, which is awesome. And it's a completely viable business model. So yeah, I think we're living in an exciting time. And to come back to your first point, the first one of your question, which was about that uncertainty that you have in university and [00:37:01] S1: Yeah, yeah.
00:37:01 · Sid Dissanayake, Sachin
[00:37:01] S1: Yeah, yeah. [00:37:01] S0: I think what I'd say to your audience is it's always going be there. Never think that uncertainty is going to be there. Through our podcast, we've talked to some people that we would all deem really successful. And trust me, they're as confused as you. No one ever has their life figured out. They pretend to know it. Like when I say I want to start a social impact VC, there's so many moments when I second guess that, right? Like, don't everyone in the, especially in the business and law world, everyone projects this sense of knowing what's going on because that's how they, you know, make that's how they sell their product or they, you know, actually But do well in the internally, everyone has this element of imposter syndrome. In university, think about where you want to go that macro that top down that approach I was talking about before. And whatever path you think you're gonna do to get there, it's not gonna be. There's gonna be so many iterations and weird wacky routes along the way. [00:37:55] S1: Yeah, I mean, for those university students out there who might be interested in social impact and social justice, and they may want to develop their interests even more. Obviously, are in that space at university. You know, I don't know much about it. So I want you know, pick your brains as much as possible. In your own experience, are there are there ways that students can get involved in social impact and social entrepreneurship at university?