Sequoia Capital (Don Valentine, Mike Morittz, Doug Leone)

0:48 - First I want to talk about what separates you from others.
It's quite amusing when I think back, of all the seemingly very small things that really played a pivotal role. I remember in my first job, when the CEO of a small company, 'Go clean the bathrooms.' And I read, and I heard, that, 'boy, it starts at the bottom; it starts by cleaning the bathroom.' And I remember cleaning the bathrooms that day and saying, 'I got you now, because you let me into the business world.'"

The other thing as I look back that was quite formative: being an only child, lots of love around my family. No means, but lots of love. And that was a blessing.

But a pretty rough high school four years. The high school years are tender years. It's the first time that girls come into play and so on, and those are not easy years. And to this day, I have to catch myself; I have to catch myself from letting my ego and my insecurities get the best of me, as I want my high school friends who I haven't seen for forty years to realize how wrong they were. And I think it's humorous that at the age of 57 I still think about the high school friends. So those are the little things that really, really push me to want to achieve.
[...]
My life really went into three different groups. In the first few years it was about 'making it'. Can I make it, can I make it, can I make it. From the age of 35 to 50, I just wanted to be the very best. That really, really drove me. From 50, 55 to this point, at 57 and hopefully through the end of my career, the thing that really, really drives me is working with younger people. It's kind of a rude line, but I don't want to hang out with people like me, I don't want to hang out with old people, I want to hang out with people like you. So, at Sequoia Capital, finding a young, talented, partner / investor / employee and helping them in the greatest way possible is really what keeps me going now.

4:05 - Q: The path to success is not an obvious one. You graduated from graduate school on the east coast and decided to come back to the west coast. Why did you make that choice?

I think luck played a great role. My first job in sales was selling north of 96th street in NYC. Now it's cool to be north of 96th street, let me tell you, in 1979 it wasn't cool to be north of 96th street. It was unsafe to walk north of 96th street. But that location had one important thing: it had Columbia University, where someone explained to me what the ARPANET was. And that caused me to get a job at Sun Microsystems. Again, that crappy sales territory and you could say I made my own break because I asked some questions, but that unlucky break led to a lucky break. Sun Microsystems employee number 50-something. And I really thought I was a big shot, I was 26, 27 selling boatloads of computers, got promoted, and then I met Vinod Khosla, holy cow, this guy is as old as I am and he's a board member...Scott McNealy, holy cow this guy is as old as me, he's the President and CEO. And then I learned the words 'venture capitalist'; I had no idea what it was but it sounded pretty good to me. So I just figured out what a venture guy was, and I decided that I wanted to be one of them. And I figured that I should get a Master's, learn a little more, get a second Master's, and then I wrote 80 letters to venture firms letting them know 'I'm going to be in California'. Trying to sweet-talk all the assistants, I got an interview with Don Valentine at 5 on a Monday, who took me to his office and asked me, 'What's important?' Of course, I knew what's important; I spoke for about 7-8 minutes. I gave it all. Thirty seconds of silence, and he said, 'What else?' 'Uhhhhh.....' I'd just given it all, and I said, 'Don, I gave you everything I know, I can't give any more!' But the fact that I was so candid and the fact that I told it like it is, and the fact that I had a sales background caused me to be hired, but to make a long story short, it was a lucky break to sell at Columbia, it was a lucky break to ask a few questions, it was a lucky break to learn about Sun Microsystems, whom I wrote a letter and got a cold-call interview, and so in some cases, I think you make your own break, but make no mistake, a great deal of the reason I'm here has to do with luck, I firmly believe that.

8:10 - Q: I'd like to switch over to your leadership to Sequoia. What about Sequoia separates it from the others?



12:40 - Q: What kinds of things do you implement as a firm to keep everyone hungry?



14:40 - Q: How do you pitch VCs? [he dodges the question]

[He takes a side-note]

Some of the best pitches: Drew Houston

Fred Leddy

17:50 - Q: What types of entrepreneurs make the best founders?

I think entrepreneurs, like investors, come in different flavors. And I will tell you--and as I told my kids--that if you're desperate, it's a great asset. If you have too many choices in life, it clouds your thinking. When you only have one way to go and that's forward, it's very easy--you just go, go, go. Failure is truly not an option. Now, what we look for in entrepreneurs is people that have not followed the same tracks. People that have done quirky things, that have taken risks. We look for that. We look for people knowledge in the domain, not so much the best-minded at business because they want to make some monye. We actually look for people who are very interested in their product or service being used by the next 10, 20 million people. And we also look for people--a little secret--that solved a problem that they have. And it just so happened--they don't know it, we don't know it--but they're the proxy for the next 20 million users. So Yann at WhatsApp understood privacy and low-cost messaging; he had that need. He started WhatsApp. Well the founders of Yahoo from Stanford couldn't find anything on the Internet, so they built a search engine, they built a yellow pages. Or something as simple as Zappos. The founders of Zappos couldn't find their shoes! So we look for people that are trying to solve problems that they themselves have. And hopefully a new problem. And if we see that, that's a little tell for us that we may be onto something because we may find our first beta site, the founder for the next generation.

20:10 - Q: One issue that affects SV is a gender gap. Can you talk about that?


22:20 - Q: Are these companies really worth what they're being valued at?


27:20 - Q: What's your opinion of what people are saying about angels becoming more important relative to VCs?

(good advice)

30:10 - Q: 
- Raise as little as you can, leaving yourself maybe a quarter buffer.
- Be very generous with the first 2-3 engineers. An A+ engineer will be able to help you recruit an A engineer.

31:20 - Q: What's the deal with your success in emerging markets?

- We decentralized the investing-side of the house, and we centralized the legal/compliance-side of the house.

33:30 - [Switches to questions from the audience]

34:00 - Q: You weren't as successful in Brazil; what happened?

We scaled back in Brazil because there aren't enough engineers coming out of Brazil.

37:00 - Q: Do you think that your lack of women at the top is leading you to miss out on women entrepreneurs?


38:40 - Q: Do you have any habits or ways that increase your odds of being lucky?

I lean forward--not in writing checks, but in listening. I remember being on a panel with another venture person who said--I won't tell you his name--he said, 'Well, we like our business plan to come from screened sources: lawyers, and so on'. And then it was my turn to answer the question--this is a little before email, I said 8543927 (meaning our phone number). And so the thing I like to do, I like to go look in all the nooks and crannies where it's not hip to go look. Or when I hear something is really crappy, 'this is really a bad time', my brains works, "It's a bad time? Terrific, I wanna go look." And then just--it's from my sales days. I guess now if you're in sales they hand you leads; when I was in sales, nobody every handed me a lead. I twas a lot of cold-calling. And in one company, especially the company where the lady's the president, I'm terrifically proud that I cold-called it myself. Is that luck? No, I think hustle, luck, and--look, there's a lot of people as talented as I that could be sitting right here. I don't have any special talents. I want to make that crystal clear. There's a lot of people who [??] and yet I'm the one sitting here, so luck has something to do with it. But I will tell you, hustle has a great deal to do with it as well.

40:55 - Q: [Huh?] [Doug interprets it as a question of what sectors are hot]

He admits that he wouldn't have guessed that Google / YouTube / AirBnB were going to be hot sectors.

44:15 - Q: How do you stay hungry when you've started to taste success?

Raw, raw fear. I still have this fear that I'm gonna be poor, that they're gonna throw me out of Sequoia Capital. And it's not a game I play with myself.

46:35 - Q: What matters most to you, and why?
1) If you choose to have kids, invest in your kids.
2) Go for it, have success, but bring others along with you. Get away from the jerks.
3) Bring it, every day. Fearlessly. Just go, go, go.