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Mike Vernal

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15
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2019-08-26
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2019-08-26
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1
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  1. “Might be interesting. And then final one, Mike, tell me, the most recent publicly announced investment, and why did you say yes and get excited? So we just partnered with a company called Verkata, which is a security camera company. And I'm incredibly excited about this company for a whole host of reasons, but I'll give you two. First is, I think there's a lot of magic that can happen when you combine great hardware talent, great software talent.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “An underrated rocks are in the industry that deserves more credit. I'm on a bit of a Colin Greenwood kick at the moment, who's the basis for Radiohead. I think he's just a very talented and melodic bassist. Love it. Price sensitivity. How much attention does one really pay the price today? I think there could be many contexts. What I will say is I think almost every startup underprices its product. And for years, a venture investor investing? This is tough. I think for a truly exceptional company, you should always make an exception. But if you make the exception, the norm, it is the new norm. So I think you have to pay attention in aggregate, but also be flexible when really called for. What's the single biggest challenge of your role with Sequoia today? Time management. There are far more interesting companies created each year than I have time to meet. How do you prioritize? It is a constant battle, but I think it is a blend of trying to read everything that I get and look at everything quickly and then just try to meet everything that I think.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Opportunities That's a very interesting question. I think one that is hotly debated, I don't want to pretend that I'm an expert here. I think it depends on the context and how accurate you need the model to be. I think if you talk to people that are doing autonomous vehicles, for instance, I think they feel that simulation might make some common cases more efficient. But the hard part of driving a car autonomously is the edge cases that live beyond 99.99. And I think those ones are just hard to imagine, let alone generate synthetically. I do want to finish though, Mike, on my favorite element of any episode being the quick fire round. So I say a short statement and then you hit me with your immediate thoughts. It's about 60 seconds or less per one. Are you ready? I hope so, yes. So I'm flying to the West Coast and I need a book. What is the must read? A hundred years of solitude. I think the most magically written book of all time, or at least that I've ever read.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Yeah, I think it's very interesting. I mean, there's, depending much stats, companies will have 50, 100, 150, 200 more different SaaS apps. I probably have a bunch of thoughts on this topic. I think the first is there's a famous Barksdale quote where there's two ways to make money, bundling and unbundling. And I think for the past 10 years, there's kind of been an unbundling of on-premise software and V1 SaaS, and there's been this notion of best of breed. And I think you've ended up that sort of combined with the funding environment, which I think is prolific. You've ended up with, I think, just SaaS tools that are just nicheer and nicher. And as a result, I meet companies and opportunities that I think are very clearly features of something larger. And there may be charging a dollar per employee per month or $2 per employee per month or something like that. And so I think there will be a correction, like often in the early days of a market, you'll see this proliferation of different”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “But on the other hand, I'm like, it doesn't matter. Just pick one and build it. Don't rule it out to everyone, roll it out to some people, measure it, figure out if it's working or not. And if it's not working, then just go back and build B. Just optimize for doing things somewhat quickly, learning, and then sort of iterating based off of that. In venture, on the other side, the most important thing that we do is make decisions. And that's, I think, why there's a lot of formalism around decision making. Most firms have a day where they make decisions. It's typically Monday. Most firms write in a memo before they make a decision. Most firms vote when they're making a decision sort of, et cetera, et cetera. And I think the reason for that is those decisions are effectively terminal. If you pass on around and then someone else does it, that round is done and you can't go get a second bite at that apple. You might be able to lead the next round if you made a mistake, but they are terminal decisions. And so that, to me, the thing that's been really interesting is coming from an operational world where I think people value tempo.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Yeah, so I think of decisions as terminal and non-terminal. Some people sometimes talk about these as type one versus type 2 decisions. But terminal decisions are effectively, once you make that decision, you can't reverse it. You can't go back. Whereas non-terminal are you make a decision, you do it for a while. If it was wrong, you just go back and change the decision. And in my experience, there are incredibly few decisions in an operational role that are terminal decisions. Like you can just do something and build it for a while. And if it was wrong, you can go back and do it again. Even with hiring decisions, if you want to hire someone and then you decide not to hire them and you realize there was a mistake, you can go back to them and try to hire them again, et cetera, et cetera. And so in operating, I really think what is most important is just tempo and feedback loop. Like sometimes I'll talk to founders that I work with and they will be racking their brain around whether they should build A or they should build a B. And on the one hand, I care deeply about product. I might have an opinion about A versus B.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Go work at the company. And I think both of those tend to get to some intangible instinct as opposed to something that is maybe more quantified or rational. But at least for me, I keep trying to, as I make investments, think if I were not at Sequoia, would I go and join this company?”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “One of the things we talk about here is the importance of the conviction of what we call the sponsor, the person who is proposing the investment. I think you can get feedback and hard questions and the like from your partners and from the rest of the partnership. And I think that's really important. But I think the thing that I am discovering is even more important is really your internal conviction about an opportunity. And I don't have a great way of quantifying that, but I think two things that I have found are one, whether or not you've really fallen in love with the company and whether you fall in love with the founding team. And this is something that you want to work on kind of regardless of outcome. I think if it is a great investment and you're not excited about working on the province space or with a team or something like that, then that's very strong signal you should probably take. And then I think another litmus test is just, would you want to quit?”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “People to meet it. And then I started thinking and writing and trying to play out the future, understand how the market was going to play out, understand the terminal market structure, et cetera, et cetera. And in each case, I started by being instinctually really interested in the company. And then as I rationalized it, I rationalized away why this might work, but it probably wasn't going to be a great company. In each of those cases, I just didn't trust my instincts or gut enough. And it's tough because you definitely some people do this, but we do not want to be an instinctual or a gut-driven firm. I think we try to be very rigorous and rational about our investment decisions. But there's some balance I think you have to strike between your sort of initial gut instinct and then all of the sort of analysis and thinking that you can do about a company.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Yeah, one of the good and bad things about venture is the feedback cycle. So the bad part about it is it's a very long feedback cycle. It takes eight to ten years to really understand if a company is going to be great and enduring or not. But on the good side, the decision making process, since it's the most important thing, tends to be fairly objective and well documented. Write maybe a short memo, maybe you'll write a longer memo if you want investment. And you can always go back and sort of read through them. And so in my case, I've only been here for a few years, so it's early to have categorical data about which things are misses or not, but I have my own internal scorecard of things that might end up being misses. And the interesting thing about most of them is I have yet to meet a company once think it wasn't interesting, and then have it actually be very interesting. For the handful of companies where I think I probably made a mistake, I thought it was pretty interesting. I usually invited more people.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “So it's often, I think people who really understand their domain and really understand their strategy can often articulate it in just a handful of words. I think that singular focus on, okay, there's one thing that matters, this is the thing that we're going to really focus on, drove tremendous performance. I find a similar dynamic when I meet entrepreneurs.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Will A or B be more impactful towards that goal? You know, as I meet companies today, like the ones that I think are just really head and shoulders above the rest are typically the ones that are just amazing at focus, have incredible clarity of thought about what are we trying to accomplish, what are the steps we need to take there, have tremendous focus on only doing the stuff that is actually important and critical, and then just relentless execution against what that is. And that to me, I think pattern matching on people that I think were really impactful at Facebook and seeing it in entrepreneurs, it comes down to clarity of thought. It comes down to grit and just sort of relentless, focused execution.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Yeah, I mean, there's a lot to be written and probably a lot that still remains to be written about Facebook. But I think the most core thing that I learned there is, and it sounds a little bit trite, but execution matters. Execution matters, tempo matters, focus matters. I think what I see in a lot of companies, both big and small, is kind of general morphous forward progress, people doing good things. But I rarely see people that are really dialed in, really understand what are we trying to accomplish, what is the goal, how are we measuring our progress towards the goal. I could do A or B, which one is actually going to be more impactful. And I think that ethos started with the growth team at Facebook. There were a lot of very high quality and executionally excellent people at Facebook, but I think the growth team really sort of helped define this notion of focus and extreme clarity around what are you actually trying to accomplish. Should you do A or B?”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Born maybe a week before my eight year anniversary at Facebook. And so it felt like a good time to just reflect and figure out I'd been at Facebook for eight years. It's an amazing company. But to think about what I wanted to do next. And I really loved the early days of Facebook. It's probably the most stressful, but also the most fun part of my career. It was incredibly chaotic. It was incredibly idealistic. People were sleeping in the office, working through the night. There was just a tremendous amount of energy and this optimism about just being able to create something from nothing. As I thought about the different things that I could do next, the thing that got me most excited was this idea of working with very early stage founders, precede seed folks in a garage that had that kind of idealism and sort of irrational energy. And so towards the end of my opportunity to leave, I decided to switch and I've been here for a little over three years and time flies.”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “I never expected to be inventured. It was not a career goal. It was never a thing that I aspired to. So it's a little bit of an indirect story. So my freshman year roommate in college, who's one of my closest friends, started a company in 2009 after leaving Apple. Sequoia led the A and Brian Schreier here joined the board. Stephen at about the same time, a good friend of mine who was my PM at Microsoft before I joined Facebook also left Microsoft to start a company in 2009. And Sequoia led the A there and Brian also joined the board there. And so I ended up with multiple connections to Brian. And both of them said Brian's an amazing guy. You should get to know him. And so I got to know Brian a little bit. Then I got to know the rest of the firm. They invited me to join the Scouts program at some point. So that was kind of the backdrop. And then in early 2016, my wife and I had our first child and I took six or eight weeks off opportunity to leave. And it happened to coincide. My son was”

    2019-08-26 · The Twenty Minute VC · 20VC: Sequoia's Mike Vernal on His Biggest Lessons From 8 Years of Hyper-Growth at Facebook, Why The Strength of Data Moats Is Over-Rated Today and The Challenge of "Overthinking Investments" In Venture · IDENTIFIED FROM THE TRANSCRIPT · source