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David Cahn

lines on the record: 82
first: 2024-08-05
most recent: 2024-08-05
sittings or episodes: 1
sources: podcast

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“When am I learning how to drive? I don't know how to drive. I grew up in New York City and Roloff has been giving me a lot of pressure on this, so I'm actually currently taking driving lessons and learning how to drive”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“It's hard. I mean, we talked about some of this. Like you think, okay, winning is going to be easier now because we have this great brand and I get to leverage kind of the history of this firm. And yet selection is so hard because the bar just goes up a ton, right? The bar is like, is this going to be YouTube? Is this going to be Instagram? Is this going to be DoorDash if you feel that it is like crazy, obviously a good investment? And I think that's part of what I've learned at Sequoia is, yeah, your hit rate is still not going to be 100% if you're doing things. If you're doing that, but I think for an LP, that's fantastic. Like, wouldn't you want to be an investor in a portfolio of companies where the person doing it thought it was incredibly obvious to do it?”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Definitely OpenAI. I mean, OpenAI has a brand. It has consumer distribution. It has product market fit with ChatGPT, which is a 3.4 billion dollar revenue business now. I think ChatGBT will definitely be around. I think a bunch of the others will too for what it's worth. But the ChatGBT brand is just so valuable that it seems very improbable to me that it wouldn't be around”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Mike Volpee. I think Mike Volpe is just a fantastic investor. I got to learn from him. I was on the board of Starburst. I kind of watched him. When you're coming up, you sort of see these kind of legends of industry and you sort of get to watch them on the board. And they're kind of the main point person anyways. I just think he's done a fantastic job. He's involved in companies like Clickhouse, Starburst Data. He was one of the early investors in Confluence, Scale AI. I think Mike Vulpe is just a fantastic investor. And I was sort of like a fly on the wall studying him. So I'm sure he didn't notice me as much. But he's just a really good investor.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Change my mind a lot in the last 12 months. I changed my mind a lot. I'm having a baby in two months, so I think that is something that is big and that has changed a lot of my perspective on a lot of things.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I tell founders all the time if you find someone who's going to transform your business, give them 5% of the company. Now, I say that it's an extreme statement. Maybe it's 4%, maybe it's 3%, but I think we get very married to like, oh, an early engineer is worth 50 bips and an executive is worth 200 bips. And it's like, these are made-up numbers.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“We talked about Paul at Subase. I mean, that meeting just punched me in the face. I grew up building databases. I love the database space. Paul was the second biggest launch on hacker news ever. And I just knew immediately, I'd been spending a lot of time around database. I just knew immediately, wow, this is really special.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Technology. I just really like Justin. He's super smart. He was basically the smartest person that I'd talk to in all my diligence on Snowblag and Databricks. And so I flew out to Boston. I remember flying out to Boston in January, went to see him, talked to him about his business. At the time, he was not raising capital. It was kind of a consulting firm anyways for a while. I'd gotten to know him over 12 months. And then finally, he brought in the founders of the open source technology. They joined him from Facebook. He sort of turned this into kind of a venture style company. And in April of 2020, he had five term sheets. And I'd just done all the work. I had sort of been around the table for long enough. I'd known him and I was able to make it, I think, a pretty easy decision. And that's just a story that I'm really proud of. And, you know, you always remember that because someone's taking a chance on you. When you're doing your first investment, someone's taking a chance on you.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Say the deal that is most memorable for me is the first one that I was like, you're the associate ideal, it's a different thing. But like, you're the guy who kind of found the deal. You're the guy who kind of like helped win it, right? That's the deal where you always remember that. For me, that Starburst data, and I'll tell you the story. I met Justin Borgman on a customer diligence call on Databricks. That's why I met the founder. At the time, he was running a consulting shop around a technology called Presto, which was an open source.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I love the mornings. I just probably naturally biologically always like the mornings. I wake up at 5 a.m. I'm at the gym at 5.30. I bike to work every day. And so I bike from the gym up through Stanford and then up Sandhill Road. And I'll tell you, that's like such an inspiring experience. Like you bike through Stanford. It's like, this is the history. This place is built around Stanford. All this great technology has come out of here. You kind of bike up Sandhill Road. The mountains in the background, the sun is coming out. And you just feel like, man, this is going to be awesome. There's so much history here. Sandhill Road is so phenomenal. I'm going to participate in this thing that's sort of been going for 50 years. Hopefully we're going for many, many more years. And you get to the office and you're super fired up. And I try to meet a founder in the morning. I want to come in fired up and meet with a great founder and talk to them about their business. And it's just wonderful.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, look, I think I'm an inning two of my career. I think I've got a long way to go. And at the end of the day, I haven't backed any company that's worth $100 billion, right? I'm not a slugger yet. I'd like to become a slugger. I think I'm hopefully doing the work to get there, but I don't think I'm a slugger yet. And I think I've got a long way to go to get there. I hope that I can learn that at Sequoia. I hope that I can imbibe a lot of information from people. And I'm going to work hard every day because every day I know every founder I meet, this could be the company that is my YouTube, my Instagram, my Airbnb, my DoorDash. And so I take every single meeting super seriously because I'm looking for that opportunity.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Came up with a bunch of these kind of creative things that I would do. There was a phase that I went through for more than a year where I recorded a loom video, one Loom video every single day. And I was just at 7 p.m., I would record a Loom video. That was what I needed to do. And I would find the coolest product I could find. I would record a Loom video and I'd send it to the founder. And then actually one founder came back to me and he was like, I love this tactic so much that I told my sales team they needed to do it. And I'm calling it the emo loom. That's what he named it. And so yeah, you got to do what you can to get in front of people.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you probably actually maybe can relate to this. Like, in the beginning, it's super hard, and nobody wants to give you the time of day. They ignore you. They don't respond to you. And so I think in the beginning, it was about how do I just get people's attention? Once I get in front of people, then I think you can make your case, et cetera. But I think getting in front of people is really hard. And so one thing I used to do is I went through this phase where every time I met a founder that I really liked, I would go through their Twitter. I'd figure out something they really liked, let's say some TV show. And then I'd go on cameo and I would find the actress or actor that they like really liked. And I would get that person to record a video for them. And I would send them that video. In hindsight, it's kind of ridiculous. It was kind of ridiculous thing to do. And yet it was shockingly effective. Like I will tell you that ridiculous.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I think you would think that's true, and it's not true, basically. I think my deal flow basically didn't change at all. And I think what that tells you is I'm just an outbound hunter. That's who I am. I'm always the best founders don't want to meet with VCs. That's the reality of it. You have to convince them. I have this phrase I like to use, like, you have to earn the right to win. It's like a mantra that I had for many years, especially when I was coming up. I just think you have to do the work to earn the right to even spend 30 minutes with a founder. Founder's time is super valuable. And that doesn't change at Sequoia. Founders don't want to spend time with VCs for the sake of spending time with VCs. All of my sort of deal flow, if you will, is just me being out there hunting in the market.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I just think the value proposition to founders is different, right? Before the value proposition is, hey, you get to work with me, I'm going to be great, I'm going to work with you. We're going to try to build this company together. Now the value proposition is, hey, I could be an idiot, okay? But you're going to be able to tell engineers that you're working with Sequoia. And engineers are probably going to want to work with you. Now, hopefully, I'm fantastic also, but I think even if I'm not, then the Sequoia brand itself is pretty valuable. So I think it does change the game a lot in terms of winning the deal.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I was going to say an important selection is the most important. And I think winning comes behind that and sourcing probably is actually, maybe it's tied, but I think it's probably third. I would say in terms of my strengths, I think sourcing is something that I've sort of just worked at. I've done a lot of founder meetings. I've hustled super hard. I think in the beginning of your career, you have to get phenomenal at that. I think actually winning the deal is something that was really important early in my career. At Sequoia, I think winning the deal is actually a slightly less important probably because you can leverage the Sequoia brand.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, I think there's advantages to youth and there's advantages to experience. And I think you have to make the most with the cards you've been dealt. And so I'm young. I need to play the best young person's game there is. I can't play the Douglone game. Doug and I are not the same. Doug is way more experienced than I am, right?”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“And it's so rare. It's something I look for and think about. And maybe one final point on this is. Think you start with all four of them, right? Like, I believe I'm a big believer in growth mindset. You can decide I'm going to become good at these things. And I think you can work on these things over time.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Work. And you think about Einstein, who is this intuitive person, everything was a thought experiment for him. It wasn't science, it was intuition. You think of Ivan, and you think of Brian Chesky at Airbnb, right? This crazy idea. We're going to have people sleeping on everyone else's couches and renting out their apartments. I mean, yes, they build great technology, but that intuition was just so brilliant at that time. And then think you have the final piece, and I think this is one of the most underestimated pieces, is intuition applied to humans. And I think this is leadership. Leadership is, hey, I understand you. I understand what you need. I understand what motivates you. And I think that good founders, and I need all four of these dimensions. And so when I look at founders, I sort of ask myself, hey, I think if you have one of these, you can be very good. I think if you have two of these, you can be great. I think if you have three of these, you can build a billion dollar company. You need all four of these to build a $10 billion company, $100 billion company. I think that's a visionary founder. And I think one founder who I've worked with that really embodies that is Paul at Subabase. I think he has all four of these qualities.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“And I'll just describe it. There's one axis is basically science, and one axis is intuition and sort of two by two matrix. You have science and intuition, and then you have human and technology. So science applied to technology is kind of the easiest one, which is that's just an engineer, right? You apply science to technology, become a good engineer. You apply science to yourself, to the human, and I think what that becomes, that's what I call this kind of hardcore mindset. Elon obviously has sort of coined that term and sort of a hardcore person says, how do I maximize my own potential? They're thinking consciously about that. They're thinking tangibly about that. One thing they might do is work super hard because it turns out people who work hard generally do produce more than people who don't work super hard. But there's other things that you might figure out. Here's how I can maximize my efficiency, et cetera, et cetera. So I think that is sort of the science element. But the intuition element is almost more interesting. And it's a thing that I've been trying to get better at and sort of trying to improve on and think about. So you have intuition applied to technology. That's like Ivan at Notion, right? It's like, how is this supposed to look? How is this supposed to work?”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I think about this so much. One thing that occurred to me earlier this year as I've been thinking about this a lot was I was reading, went down the rabbit hole. I read the Elon Walter Isaacson bio, which was just fantastic. And so I thought, hey, this Walter Isaacson guy, he's a good writer. Let me just read everything else that he's read. So I read his Steve Jobs bio. I read his Einstein bio. I read his Benjamin Franklin bio. So he's written all these really great biographies. And I was just thinking about, wow, these sort of historic visionaries, these amazing figures. And at the same time, obviously my day-to-day job is I meet with a lot of founders. And at the time, I was organizing this dinner. I called it the Harto dinner. It was for the most hardcore young founders, you know, who are like, we're going to go conquer the world. And it was a great dinner. The day before the dinner, it's just like these two ideas were just colliding in my mind. And I was like, what do these amazing historic figures having common with these people that I'm going to sit down with at dinner tomorrow who have the potential to become historic figures, right? And what occurred to me, I sort of came up with this framework, it is two dimensions.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“That comes down to adaptability. And I think Pat is someone who's really adaptive. You look at the market landscape today, it's just different. And so I think the right strategy is this barbell approach, right? Where you're doing early companies and you're also doing late companies, pat invested in growth therapy this year, right? This is a later stage company. This is a mature company generating cash. So I think Pat is actually good at kind of picking spots and he's picking sports because he's paying attention to the market dynamics. And I've done both Harvey, which is early and grow therapy, which is late. That's pretty amazing.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Pat is very, very good. Pat is just disciplined, right? I think he waits for the fat pitch. He's waiting for the right companies. I think that means his portfolio as a result is very strong.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I think Sonia is very, very good. I would say Sonia. Sonia is really good at AI. She's super aggressive. She's out there. She's talking to founders. Sonia's phenomenal.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“So, so high. Unless this company is one of the 50 most important companies in the world, you haven't done your job well. And so I think that is good pressure, right? I think that is good, a source of, hey, this is just demanding. You need to pursue excellence at a very, very high level. And I think Sekoi does a good job of giving you the framework and tools and learnings to go do that.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I think Sequoia does a good job of saying the only thing that matters is the next investment and is equally likely to come from you as anybody else. Pat does a good job of this, especially of like, this is the business model. The whole business model is we need to attract good people and then you need to make good investments and we need to set you up to do that. I think Sukoi does a good job of that. Now at the same time, Sequoia is not a low pressure place to go work, right? You're sitting next to people who did these incredible investments, DoorDash, Instagram, Instacart, Zoom, Snowflake, right? So there's pressure, right? And I think it changes how you invest. It changes like I think it kind of changes your brain. It rewires you. There's this great line that people at Sequoia say, which is Sequoia hires investors, breaks them down, and then rebuilds them in the Sequoia mold. I certainly feel like I've gone through that, right? Which is, are you going to build this company for the long term? So Quaker is so much about company building. And so I think that thing that really reshapes you is not just the company building, but the bar for success is so.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, I think the whole structure of the partnership is we are here to support you. We are here to teach you. You're going to learn from us. But at the end of the day, you got to make these decisions. And at the end of the day, there's a clear definition of success. And that's being a slugger. And I think the constraint, by the way, we”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“That's why these partnerships work is because they're testing your conviction in that way. And so conviction is the hard thing. And conviction is something no one else can give you.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Waiting for a fat pitch. That's something to learn from Pat. Andrew is really good at connecting with founders. He's deeply understands product. That's something to learn from Andrew. So there's an element where you take these sluggers, you kind of learn from them. But I think to your point, the other side of that is venture is a game where you're on the field every day. No one's on the field for you. Nobody can do this job for you. You can get all the advice. You can get all the help. You can get all the learning. But at the end of the day, you got to be on the field. You got to deliver a product to founders that they want. You have to be someone that they want to work with. And you have to develop your own style to do that. And the hardest part of this job, and that's the thing that you can't outsource anybody, is push comes to shove Monday morning. You're in that partner meeting. You have to put your neck on the line. Do I want to do this investment? And something I like to say to people is, I don't think the hardest part of venture is figuring out what are the good companies. I think the hardest part of venture is figuring out when are you going to put your neck on the line for this company and all good partnerships force you to put your neck on the line. That's the whole system.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“First of all, I totally agree on these kind of two opposing forces. I would almost describe one as like there is a definition of success in this business. You're either a slugger or you are not. If you are generating billion-dollar gains, you are a slugger. Douglioni is a slugger. Pat Grady is a slugger. And you read is a slugger. You either are slugging or you're not. And I think one of the delusions of this business is, oh, you can be good at this business without being a slugger. No, there is one definition of success in this business, and that is generating billion dollar plus gains. On the other hand, and you can get a lot of advice and you can learn from those people and you can see what they're doing. And so, and I think, frankly, the reason I'm at Sequoia is like sitting next to Sluggers is pretty cool. You get to learn a lot from them. You see Roloff. You invested in YouTube and Instagram, right? What enabled him to do that? What enabled him to see that? Especially given my whole modus operandi as this like, let me study people and figure out what they're good at and get 80% as good. Man, as this like amazing place, right? Like drinking from the fire hose. You have all these amazing people and you get to kind of extract, okay, how does really disciplined? He's really good at.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“As good as you, if this is your superpower, but I'd like to be 80% as good at you at your superpower. And if I can be 80% as good as 10 people on each of their 10 superpowers, I'll probably be pretty, pretty good.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I was so naive when I started. I really didn't know what venture capital was. I didn't understand what the industry was. I didn't really know what the job was. The biggest thing that served me well over those years was every time I meet someone, I just try to figure out what are they really good at and how can I learn from this. There was one person who's really good at sourcing. Why are they really good at sourcing? What are the things they're doing to be really good at sourcing? And I would learn a bunch of that. Another person, this person's a really good leader. Why are they a good leader? Oh, it turns out people really like to follow them. People voluntarily choose to follow them. That probably means this person's a really good leader. What are the characteristics? What are the things that they do? Oh, they're really loyal. Loyalty is really important when you're a leader. Anyways, I think there's a bunch of these dimensions where a big part of the learning in the early years was drinking from the fire hose and it was such a fantastic experience. See people who are really great at their craft, understand what their superpower is, understand what they're doing, what are the actual behaviors that lead to that superpower. And then my goal that I said for myself is I'm probably not going to be as 100%.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“You call customers in 2018, you ask them, what do you think about Databricks? They'd say, oh, well, Amazon has their own competitor, Google has their own competitor, Snowflake, oh, there's BigQuery, there's Redshift, they're all kind of the same. It's not that special. And then, of course, fast forward six years, these are two of the most valuable companies that came out of this cohort. So I think the lesson is you have to listen to what customers do. They continue to pay for the, especially expensive products. If people are paying for expensive products and telling you they're going to churn, you probably shouldn't listen to that. They're paying for it for a reason. And so the thing I focus on is how much value is this company delivering as opposed to our customers telling me they're going to stick with it forever because you just don't know if that's right.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, first, just to calibrate, I was the associate on those deals. So I built the models, I did the customer calls, but I was not the lead investor on those deals. What I will say, and just because you picked those companies, I'll give you kind of a through line on those four, which is I think the lesson from those companies is listen to what people do, not what people say. And I'll tell you why. When I called the customers on Marquetta, you called DoorDash, Instacart Square. Those were kind of the big customers. And you ask them, do you guys like Marquetta? They would say, it's fantastic, but it's too expensive. We're going to rip it out. We're going to build this ourselves. That's what everyone said when you called them. Now, fast forward five years later, Marquette is a public company. None of those companies have churned. It continues to do super well. UiPath, same thing. You call all the customers. They say, oh, it's a band-aid solution. We're just using it for now. Eventually, we're going to fully automate. Again, fast forward five, six years since that investment company went public. Fantastic company. People continue to use it. Even Snowflake and Databricks, same thing.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm a student of social psychology. I find psychology to be very interesting. I actually spent a lot of time reading about psychology. I think psychology drives the economy more than people realize. I think Adam Smith is just sort of deeply understood human psychology. And that's what the Invisible Hand is about. And I'm a big fan of Isaac Asimov's foundation, right? He basically describes this, it's one of the all-time great sci-fi books. And he basically says in the future, there's going to be so many people and he invents this character, Harry Selden, and Harry Selden is a psychohistorian. And Harry Selden sort of says, humans are so predictable. We have such clear behavior that when there's 100 billion humans, you can predict the future of history. And that's sort of the premise for this sci-fi book. And so I tie that back to Adam Smith in the sense of I think Adam Smith is doing that on a less grand scale of saying, hey, human behavior is understandable. Capitalism sort of takes advantages of these components of human nature. And it's one of the greatest systems that we've been able to invent so far.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a pretty good deal. So I think prices will get the spread between the risk-free return and the sort of risk adjusted return will compress, which just means.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Not a dead guy. The dead guys will basically tell you hey, my unlevered return is 10%. My levered return is 15% because the dead guys are taking their own debt. Debt is complicated, so I won't go too much into the debt stuff. But what I will say is these guys are basically earning a slightly higher yield, and they think it's really good risk adjusted. And by the way, they might be right. You're basically getting Microsoft debt through this kind of financial engineering. You're getting a slightly better return on that Microsoft debt. And you can deploy a lot of capital against that because, hey, Harry, if I offered you, instead of buying treasury bonds, you can buy really safe debt in probably the biggest and safest company in the world today at a premium to what you can earn buying treasuries. You might want to buy that.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“It's very possible. And I've spoken to a bunch of real estate investors. So something that people don't know is a lot of the capital going to fund data centers comes from real estate developers, real estate investors. And these real estate investors, I talk to them and I say, hey, do you believe that the data center you're financing is going to get used? Is there going to be enough demand for this data center? And they say, I don't really care. For me, I'm giving Microsoft money. This is a loan to a big tech company. The deal that I'm doing is backed up by the credit of Microsoft or the credit of Amazon or the credit of Google. And I'm earning, you know, I could buy Microsoft's bonds at X% yield, and I'm earning X plus 2% yield. And so this is a good risk-adjusted investment. To me, what that says is, you know, these big tech companies are basically issuing debt against their own balance sheets, but it's happening through these intermediaries, so it's perceived as kind of off-balance sheet financing.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“The numbers are getting pretty big now. And so I think one thing that we're going to see more of is off balance sheet financing. What that means is somebody else builds the data center and then Microsoft agrees to lease it for 20 years. Somebody else builds the data center. Google agrees to lease it for 20 years. What that does is it changes the financial profile of what it looks like to investors before it looked like Microsoft just spent $2 billion. Now it's going to look like Microsoft committed to spend $200 million for the next 20 years. What is that? That's basically debt, right? That's a capitalized lease is a form of debt. I wonder if some of this stuff is to minimize the amount that people perceive is being spent because you can spend in this other way that is actually kind of an overhang on your future business rather than cash out the door today.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Trying my best. But I would say it's very possible we get to a trillion dollar. I mean, it's just the math behind it, right? Just to remind folks about what the math behind it is, you basically just take NVIDIA's run rate revenue. You multiply that by two to get the total cost of the data center because about half the cost of the data center is GPUs, half is everything else. And then you multiply by two again to get the implied revenue from the companies consuming AI. And so can it get to a trillion? Absolutely. And if anything, I think what we heard this week from Zuck and Sundar is we have to keep building. We have no choice. We're sucking this prisoner's dilemma. So I don't see an end in sight. I don't know what the catalyst is for people to stop building. One thing they are doing that I think is really interesting and that's changed in the last few months is they've shifted basically before everyone is doing these CapEx off their own balance sheets. So Microsoft builds their own data center. Amazon builds their own data center. They hire the construction firm. They hire all the people doing it and it comes straight off their balance sheet. It's CapEx. It's cash flow out the door.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's first of all, I probably won't publish the piece because I only try to publish pieces when I have something to say. I'm not someone who likes, I don't really like to talk about talk for the sake of talking. So it's like I had something to say on this $600 billion question.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, I think that China is going to catch up. I think that America is a fantastic country. We have a lot of advantages. We have great immigration. We have a great capitalist economy. We have a lot of freedom. So there's a lot of reasons to believe that America will do well. China's going to do well also. I guess where do I stand on that? On net, I'm probably like America is going to do great. I actually think the AI revolution in America has a lot to do with the fact that America is a really good place to do business. It's a really good place to move. If you want to do something great, we have a great culture in Silicon Valley. So I think that America has a good shot to stay ahead, but don't underestimate your competitors. I think you always got to assume your competitor is going to perform super well. And hopefully that motivates us to do even better. I don't know that I see a scenario in which America just completely falls behind. If anything, the last two years of evidence have demonstrated that America is doing pretty darn well.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think this comes like this is sort of the AGI debate a little bit, right? Like, if you think that AGI is going to happen tomorrow, then you're very afraid. And if you don't, then you're not afraid. And that informs whether you believe in closer assurance or say I. I sort of challenge the question a little bit of like, I don't really believe this really worry too much about any of this stuff. It's like we're probably going to be fine. AI is probably going to change our lives and make it better. It's going to improve productivity. Maybe AGI is going to happen when you and I are like 90, but I don't think AGI is happening like tomorrow. And so I feel pretty good. We have closed sourced options. We have open source options. Good to have both. Would definitely not want to live in a world where we only have one option. So I'm happy that we have both. But I'm not too worried about this stuff. And Mark Andreessen has talked about this. I really like actually a lot of the stuff Mark Andreessen says on this, where he says, like people don't have religion in Silicon Valley, so they like worry about AGI. And I think that it's sort of this unknown that people want to talk about.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Look, I think we need more energy. I think we've always needed more energy. And maybe a little bit more optimistic here, where 20 years ago everyone was saying solar is going to be a big thing. Solar is a big thing now. It's kind of happened, right? The thesis has played out. No one talks about it. It happened quietly. It's sort of funny how sometimes the biggest changes happen silently. Solar is a huge portion of the US generation capacity today. And so I don't know that it's going to be this loud crisis.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And because the demand for power outstrips the amount of power we have. So, for example, everybody pretty much agrees we need more generation capacity. So if you can build a new solar farm, you're going to do that because the economics makes sense. You have a buyer. There's a lot of demand on the other side. Now that takes time, but there's a lot of mature companies doing this. Next era is the biggest, one of the biggest utility companies in the US. Fantastic company, $100 billion plus market cap company. Most people in Silicon Valley have not heard of this company. This company is investing, has been investing, by the way, to their credit for the last 10 years they've been doing this through their unregulated business. They've been investing in batteries, solar, new technologies. When I look at clean tech investments, I see them all the time around the table. And so I think that this is a really positive on America, right? Like America has these great companies like Nixera that are doing a fantastic job. They're going to keep innovating and they're going to see the demand on the other side now and people will build against that.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“We don't, and there's sort of an interesting phenomenon here, which is the Biden administration passed the IRA, the Inflation Reduction Act, and this was a huge stimulus bill that basically incentivized everyone to build solar and build batteries and all this stuff. And I think one of the great ironies, and this is me as a capitalist speaking, right, is that the forces of capitalism, AI, will drive more energy revolution than any amount of political regulation could have, right? And so I think that's just amazing.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think the real estate developers KKR own Cyrus One, Blackstone owns QTS. Fantastic investments. There's going to be huge money making investments for those firms. So those were great investments. There's other companies in this space that are really interesting. So I think that space will be interesting. Real estate developers in real estate, if you just look at real estate, it's a good business, right? And so being in that business is a good business. I think the power area is something that everyone is talking about. And I was in West Virginia two weeks ago or three weeks ago maybe. And I visited this company that's building long duration batteries that I had invested in at Cotu. And they literally built a billion dollar factory in the last 12 months. There's just tremendous industrial movement happening. And I think in 12 months, you'll see all these charts coming out of like more factories are getting built than ever before and all this stuff. The industrial revolution is just getting started.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll give away my secret here, which is that's where I'm spending time, right? I'm spending a lot of time in this supply chain area where I think there's a lot of interesting stuff in the supply chain happening. Again, it's less picked over.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, Microsoft can call you and say, I'm just going to buy all of your capacity for the next five years. Please build a new factory, right? And you're going to do that if you're the factory guy. So I think this is another advantage that the big tech companies have.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source
“Manufacturing person who runs a factory who's really good at running factories. And so I think how the supply chain gets managed is also really interesting. And the big tech companies actually do a very good job of this. And I think it's another advantage they have that's underestimated is kind of convincing the supply chain to change their behavior is something that those guys have a lot of practice doing.”
2024-08-05 · The Twenty Minute VC · 20VC: Sequoia's David Cahn on AI's $600BN Question | Why the Data Centre is the Most Important Asset | Servers, Steel and Power: The Core Pillars Powering the Future of AI · IDENTIFIED FROM THE TRANSCRIPT · source