Max Levchin, the CEO of Affirm and head of HVF, spoke with TechRepublic about the goal of HVF, his work philosophy, and his thoughts on the role of data in the future of society.
Max Levchin's attitude about Silicon Valley has changed fundamentally over the last couple of years.
A little more than two years ago, Levchin was concerned there was too much exploration of trivial ideas and not enough energy put into ideas that were fundamental to the human condition.
Then, something changed. He began to see companies taking on big projects with even bigger implications — projects to help people and power meaningful change in the world. Levchin said he sees this more and more everyday and it is inspiring to him.
Levchin is the CEO of financial services company Affirm, which was spun out of his parent company HVF (Hard Valuable Fun). He is a Silicon Valley veteran who was one of the original members of the PayPal Mafia, which he served as PayPal's CTO. Levchin founded the company Slide, which he sold to Google in 2010, helped start Yelp, and sits on the board of directors for Yahoo and Evernote.
When it comes to his philosophy on work, Levchin said that he doesn't wake up with a checklist of moral values. Instead, he routinely asks himself questions such as whether or not he is spending his time wisely.
"We're all put on Earth for as limited amount of time," Levchin said. "Am I using in a way that is great, or good enough, or wasteful?"
This philosophy drives his work at HVF. While HVF does provide some seed and early stage investing, it is not an incubator. HVF was started as the umbrella under which Levchin could pursue projects focused on data in consumer finance, enterprise document security, and disease prevention/wellness, according to its website.
With HVF, Levchin said there's a lot of potential to drive truly transformative change, there's a lot of potential to screw up, and a lot of potential to do nothing. He said the goal is to make sure that every year or two HVF spins out a company that has a profoundly positive effect on the world around it; although some of the companies will just fail. Along with Affirm, HVF spun out the company Glow, a company with an app that helps couples conceive or naturally avoid pregnancy.
"What I want to focus on is not just using data to do 'neat' stuff, but using data to do stuff that's profoundly transformative to people," Levchin said. "I think we live in a world with a lot of problems, so it's not that hard to find things to try to impact."
He is passionate about healthcare and small business finance, especially. Levchin said that HVF has some ideas around healthcare, education, and others; and he believes every one of these things can be positively affected by a data-centric approach.
With any of these issues, Levchin said they are looking for the non-obvious fixes. For example, in tackling access to clean water HVF would not invent the newest water purification system, but it would spend time thinking about what is currently known about clean water statistics and the processes in place to achieve it. Hypothetically, this could center on data about the efficiency and cost of transporting clean water, or the speed and efficiency of the desalination process. Levchin said there could already be startups working on it, but that is the approach he would take if he was working on that issue.
Big data insights help us to glean understanding of natural phenomena or analog processes more than we realize. Levchin noted that storage is getting cheaper, and processing capabilities are getting close to real time responsiveness, so we are able to analyse things almost completely.
Big data is affecting biology too, and Levchin is confident that we will eventually be able to map out the brain of a small animal using digital mapping. It may not happen for a very long time, but Levchin jokes that "a very long in computing is, like, 20 years."
While big data presents fascinating possibilities for the future, it has a slew of dissenters who say the privacy issues presented, among other things, are reasons to avoid it. Levchin believes that we're a discerning enough species to say when things are good and bad. He acknowledges that humans do make mistakes and need to be mindful, but believes it is ignorant to write something off all together.
"I'm generally a techno-optimist. So, I believe that, for every tool, there is a way to create and receive great value and also a way and potential path to abuse and destruction and value elimination," he said. "I think the ethical questions are real, and we have to be mindful of them. But, any form of blunt 'thou shalt not use data,' or any sort of a blanket prohibition that people have occasionally called for is just foolish."
Levchin was born in Kiev, Ukraine and moved to the United States with his family under political asylum in 1991. He began studying computer science at the University of Illinois at Champaign-Urbana in 1993, the same year that the first version of Mosaic was launched on that same campus. It seems that the stars aligned and he started his first company on campus a few years later.
Of course, Levchin went on to work for PayPal and Slide (and Google once it bought slide). It's safe to say he left his mark on the internet and the startup community.
SEE: How the 'PayPal Mafia' redefined success in Silicon Valley (TechRepublic cover story) | download the PDF version
In his own words...
What's the best thing you've read or watched lately?
"For inspiration on business, outside of typical business stimulus, I actually wind up watching, or re-watching, this movie Seven Samurai. It's a very famous Japanese classic and I'm going to watch it tonight, again. I believe it's a brilliant movie on a variety of levels. It's a cool action film, but it has a lot of really interesting, very deep topics covered around organizing teams, motivating, bringing people up from incompetence to competence. I find it to be the perfect management course for me."
What is your main Hobby outside of work?
"I try to ride my bike, I'm a pretty serious road cyclist. I do a fair amount of training. I generally try to ride everyday."
What is your advice for first time entrepreneurs?
"If you're going to start a company, do it now. The best advice I've ever gotten about entrepreneurship was 'start early.' If you're thinking about it and are pulled to mess around, or first I'll save up some money and then I'll go start a company, or first I'll get this certification, or finish this degree, or finish graduate school or whatever. When you're ready to start a company, you know — and you should go start a company."