E54: Spread trading big tech, capital allocation, Zillow's misfire, Progressives suffer losses

Chamath Palihapitiya disclosed that his real big-tech trade was leveraged and market-neutral: long Google and Microsoft, short Apple, Facebook, Amazon and Netflix, rather than the naked short he discussed publicly. He said a precursor—long Google, short Facebook—returned roughly 80–85% after years near parity.

Palihapitiya said Microsoft taught him on Slack’s board that distribution can beat product superiority: Teams only needed to be good enough because bundling, discounting and enterprise reach overwhelmed a standalone rival. He expected similar pressure on Notion, arguing Microsoft could win with roughly 80% feature parity.

Bird reached the NYSE only four years after David Sacks led its 2017 Series A, the first VC check he wrote at Craft Ventures. After COVID halted scooters for months, Bird shifted toward locally operated fleets; Sacks cited about $60 million quarterly revenue, roughly 27% gross profit and a $2.4 billion market value.

Palihapitiya said he nearly merged Social Capital with Kleiner Perkins about six years earlier, giving him extended access to John Doerr during the talks. Doerr told him he never sold distributed Amazon shares and sold only a small amount of Google to meet later Kleiner capital requirements.

David Friedberg deliberately built The Production Board as permanent capital rather than a conventional fund, initially with Alphabet and later Bill Gates and Allen & Co. His goal was to recycle exits indefinitely and avoid pressure to return capital, preserving risky 10x–100x opportunities that conventional venture incentives can truncate.

Zillow’s home-buying push had become a costly unwind: the episode cited plans to sell 7,000 homes for $2.8 billion, a 25% workforce cut and roughly $300 million lost in the quarter. Friedberg argued Zillow behaved less like a market maker than a speculator while simultaneously competing with brokers central to its existing business.

Palihapitiya disclosed he owned roughly 3–4% of Opendoor through a large investment and the SPAC transaction that took it public, giving him a substantial financial interest in the comparison. He contrasted Opendoor’s roughly 10% average margin with Zillow’s 3%, arguing specialized pricing software gave Opendoor a larger margin of safety.

A Chinese research team demonstrated a cell-free enzyme system that converted CO₂ into starch at nearly ten times corn’s production rate, according to Friedberg’s account. His own extrapolation—not the paper’s result—was that 27 million large tanks on 25-by-25 miles of land could offset annual human CO₂ emissions while producing useful hydrocarbons.