YouSaid · the spoken record

Pat Grady

lines on the record: 87
first: 2024-07-08
most recent: 2024-07-08
sittings or episodes: 1
sources: podcast

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“And you had decided what you wanted, and you had come up with a way to go get it, and you were very genuine, very earnest, not very earnest anymore. He was very earnest then. Very genuine, very earnest, extremely hardworking, very curious, all of the attributes that you would want out of somebody that you could be friends with or be partners with or have a long-term relationship with. And so you made it very easy for me to be kind to you because you're the sort of person that I wanted to be in business with.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a nice question. You're going to give me to choke up here. Sir Rubby, who you know, was sharing this concept one time of there are a lot of people who are sort of like auditioning for their lives versus just living their lives, meaning they are doing the things that they think they're supposed to do and jumping through the hoops that people have told them to jump through, but they haven't really figured out what it is they want to be, what it is they want to do, and what it is they want out of life. And so I mention this in relation to your question because most of the people I encounter who are earlier in their career are sort of auditioning for their lives. They haven't really figured out what it is they want, how they want to get there, and they might be working hard, but they're kind of going through the motions. And I think when I first met you, it was very different. And it was clear that you were not auditioning for your life, you were living your life.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that even if you were to freeze the capability set of the current foundation models and turn all of your attention to optimization and tuning and developer ecosystem, it would revolutionize trillions of dollars worth of industries and create trillions if not tens of trillions of dollars worth of market cap. The race is still on for advancing the capabilities of these foundation models. I think the current capabilities are powerful beyond anything people have figured out how to do with them yet.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“But at that point, it wasn't. And I remember Jim with just full conviction was explaining to me one day we were looking at some cloud company and I was poopooing it and Jim was telling me why he liked it. And he just, with 100% conviction, he was like, Greedy. He's like, don't you get it? Everything is going to the cloud. I was like, Jim, what are you talking about? Like, this software is crap, you know, like, why is everything going to crowd? He's like, no, no, no. Trust me. Everything is going to the cloud. And he had that point of view in 2007, way before, way before that was at all obvious. And so the lesson for me from that was a little bit of like trust your instincts or maybe a little bit of dare to dream. Because I think Jim had picked up enough clues to have a real point of view on the direction the world was going, even if the data at that time didn't necessarily support it.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I think Jim's two superpowers one is his ability to see the future and two is his ability to figure out people and what motivates them and how to put people together into teams and how to motivate those teams. I learned a bunch of lessons from him. The one that probably sticks out the most is on that first part, which is seeing the future because I remember back in 2007 when I first joined Sequoia and we were using, we just started using Salesforce.com. And prior to that, I was using an on-prem SIBL system at Summit Partners. And Salesforce.com circa 2007 was garbage compared to on-prem SQL system. And so I was not particularly positive on the whole idea of SAS in 2007. And fortunately, I learned”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Literally, there's a tractor in front of us taking up the whole road, and Jim and I are sitting there behind the tractor, and he turns to me and he's like, there's a technology company around here. It was this company called ClickTech, run by this guy named Mons Holtman. And it actually turned out to be a great business. It ended up going public. It was worth several billion dollars. But when we were lost in a farm field in southern Sweden, I was sweating bullets.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Two of them come to mind. One was Eric Yuan just because he was in this terrible office, but he was so full of joy and energy and enthusiasm because of this product that he was building. And it just reinforced focusing on the things that actually matter. So that was one that was pretty memorable. The other one was in the summer of 2007. So I joined Sequoi in March of 2007, Jim Gets and I come over here to London to look at an investment that we were contemplating at the time. And I convinced him to take a day trip with me to Sweden. So we flew into Copenhagen, then we drove across the bridge to Malmo or whatever's over there. And there's this thing called the Lund or Lund Technology Park that a whole bunch of startups in it. Guess is very skeptical about this trip to southern Sweden and that was reinforced when we got lost on the way to this technology park. We took the wrong exit off the freeway and we're just lost in the middle of farmland, stuck behind a tractor.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I think numbers that are further away from five are more clear in terms of your point of view, but a lot of times people are commingling bravado with conviction. If you vote a nine just because you feel like you need to vote a nine to show your conviction, that's probably not a good reason to do it. If you vote a nine because you're actually a nine and you're probably not a nine more than once in a blue moon, that's great.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“So we have actual data on this going back to 2014, where we started recording the votes numerically on every single investment. So we have about 10 years worth, which believe it or not is not conclusive because there are so few outliers that have emerged even in the last 10 years. But best we can tell whether something is consensus or contentious actually doesn't matter. The thing that matters is presence of conviction. So there could be investments where everybody's a six and the voting is zero to ten no fives. So six is above the line. Six is lukewarm enthusiasm. There could be an investment where everybody's a six, and then compare that to investment where one person's a nine, two people are eights, and then some people hate it. There's some twos and threes.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“One area where I am probably most often different than others is around this concept of fewer better things. Most of the time when a company that we're involved with wants to go do a bunch of new things, it seems to me that the better use of resources is to make the thing you already do better. The thing that you already do, unless it is absolutely heads and shoulders above any of the alternatives out there in the market, you're probably going to get more juice out of making that thing better than you are out of doing more stuff. So that's probably a place where I generally disagree with people.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Inside the building behaves accordingly would probably be okay. But I think every premortem begins with arrogance, complacency, taking it for granted that we get to be sequoia tomorrow because we were Sequoia yesterday.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I do this exercise every year and we do it as a team. I'll tell you one thing that I've heard Doug say to his kids or about his kids, which is I can give my children anything in the world except for the one thing that made me who I am, which is my sense of desperation. And I think similarly, being part of Sequoia, we have every advantage in the world, except for the one thing that made us who we are, which is a sense of desperation. And so the pre mortem for Sequoia has nothing to do with the financial markets or technology platform shifts or competitive dynamics out in the market, and it has everything to do with staying hungry, staying humble, and to use the Amazon terminology, behaving as if it is day one every single day, and that the default is if we don't go out there and earn it tomorrow we are irrelevant. I think that is true, and I think as long as everybody inside the building believes that is true.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Well, I genuinely believe that being a partner, Sequoia has the best job in the world. And we try to make sure that that's true for the very best people so that we can have a team of people who are sort of individually exceptional.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I feel like you may not be familiar with this analogy, but do you watch basketball Okay, okay, great. So the Bay Area team is the Warriors. And several years ago, the Warriors had two players who were both just A plus superstars, Steph Curry and Kevin Durant. And they managed to keep them together for several years and win championships and all that good stuff. But eventually Kevin Durant left to go somewhere else. And so one of the things that I think about inside the building is I feel like we don't just have two superstars. We have a dozen superstars. Like when I look at our team, any one of our partners could be a total star somewhere else. And so the thing that I always think about is how do we keep so many superstars together in one place and get everybody to work as a team and try to keep egos in balance and all that good stuff.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Know, we were talking about this earlier. The tiebreaker always comes down to the founder. If I'm not sure about the market but the founder just seems like dynamite, I'll probably lean in on that because to your point you mentioned this earlier, the best founders are going to surprise you by finding more TAM. We don't have to see a clear line of sight to ten billion or $100 billion or something grandiose figure. We do need to see a clear line of sight to good returns with an exceptional founder who could maybe find some upside from there.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“And so most founders at the very early stages are willing to, you know, if you think of us as a premium product, you pay something different for a premium product than you pay for a normal product and they pay for our premium product in the form of the equity. I think seed series A's pretty decent pricing power, so to speak, there. And then the later stage of the company gets, the more the company itself has already been established. And having sequined the cap table is not going to be a company making moment, it might be nice. You know, hopefully it can help them more over time, but we're not likely to get any sort of huge discount at the later stages.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I think similarly in our business, if you're way up the funnel at the moment of company inception, the difference between starting a company with Sequoia and starting a company without Sequoia can be pretty big.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“But if you look at the data, it's actually not still going risk, it's signaling advantage. And it's signaling advantage in the sense that if you have Sequoia on your cap table,”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I absolutely agree. One of the things that our competitors try to use to sell against us is what they call signaling risk. Oh, no, no, you shouldn't take Sequoia at this round, because then if they don't lead the next round, you're toast.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“career investors can be the best because they have both the right attitude and the right experience. One of the things that we try to do that we try to distinguish ourselves on is to not have the more experienced people check out and get into administrative management roles. Like we should be in the field making investments, meeting companies, doing the work, really trying to understand the details. And if we can do that, then hopefully we end up at a better place on the picking.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“It really depends. I think if you go across the value chain, sourcing in some ways might be a young person's business. Here's a tricky thing. The more experience you have, that experience compounds, the knowledge compounds, you're picking algorithm gets better. You would say, okay, the more experience you have, the better off you're going to be at picking. The problem is we're in any details business. If you're just trying to separate good from bad, you don't necessarily need to be in the details. If you're trying to separate good from great and grade from exceptional, truly exceptional, like the one out of every couple thousand companies that's really going to matter, you got to be in the details. Because the ten or fifteen that all look about the same from a distance are going to look very different when you get up close. And so picking, you need to have the attitude and the work ethic and the tenacity of somebody who's earlier in their career and trying to prove themselves coupled with the experience and the knowledge of somebody who's actually been around and seen a little bit of that, which is why I think a lot of times the sort of”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, it's funny, ironically, I'm probably weakest now where I was strongest 10 or 15 years ago, which is on the sourcing piece. That was the only way that I could distinguish myself at Sequoia in the early days was to just try to go find interesting stuff, try to find companies worthy of Doug Leone's attention.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Has been incredible. Palette Networks has been interesting because Mark McLaughlin was perfect for that hundred million to billion revenue leg of the journey. And then Naesh has been perfect for the $6 billion or whatever it is now leg of the journey. So that's been a great story.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“close to forty percent and the public markets that we held on to for many years after the IPO, or Palo Alto Networks, where we went into that IPO with the exact same ownership position as one of our co-investors, ended up generating more than a billion dollars more than them because we were more patient. And so sometimes it really pays off. Nakash is a total beast.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“That's it. And so there are some firms that say, look, we are a venture capital investor, not public market investors. We are not going to try to outsmart the public markets and figure out exactly when to distribute our positions. We're just going to do it programmatically. And I think that's a totally viable answer. Maybe say, okay, we're going to distribute a little bit as soon as the lockup comes off, a little bit more six months later, a little bit more six months after that, whatever your algorithm is, I think that's a totally okay way to do it. The way that we have chosen to do it is to try to be really good at it, which doesn't necessarily mean outsmarting the public markets. It does mean having a point of view so that when a company goes public, it's not just programmatic. You know, there's real work that happens to try to figure out where the company has a chance to go from here. And the result of that, when it works, is companies like Square, where at IPO it was a, I don't know, maybe a couple hundred million dollar gain. And by the time we distributed five years later, it was a multi-billion dollar gain. Or companies like Mongo, which have compounded.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I think there are a couple takeaways, and they're sort of a high level choice to be made, and the choice to be made is how much energy do you want to put into the harvesting?”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“We didn't need to, and nobody was putting pressure on us to do it, but we looked at it and said, okay, this is pretty good, let's go ahead and call it a win. I think today we'd be a lot more patient. We'd probably hang on to it for a lot longer. It's not always the right decision. We held on to a lot of stuff in 2021. That's worth less today than it was then.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Over time, not all at once, but it was within the first couple of years because it was the first billion dollar gain that we had ever had in the growth business, the growth business for Sequoia was kind of this fledgling, you know, second class citizen”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“He's amazing It's really hard. There are companies that we sold way too soon, and when I say we, the founders, you know, ultimately we are in support of the founders, but YouTube is a canonical example, PayPal is a canonical example. So there are companies that have been sold way too soon. There are also companies that we hold on to for too long. There's one in our portfolio now that I'm not going to name, but we had an offer from somebody to buy the company for almost $5 billion. We own just north of twenty percent. That would have been a huge home run. Now the company looks like it is kind of not headed in a very good direction. But there are companies you can sell too soon. There are companies you can hold on to for too long. Similarly in the public markets, you know, we were talking about service now. If we'd held ServiceNow through to today, it'd be a $30 billion gain, right? But we didn't. We distributed it a year or so after the IPO because it was the first billion dollar deal of it.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“O'Brien Long at Attentive? Ryan's the founder of Attentive, which is a marketing software company. And I remember one time he was saying, hey, I think there's sort of two types of executives out there who would like to get involved with venture capital-backed companies. They're the kind who view it as their job to tell the founder what to do, and they're the kind who view it as their job to be in service to the founder. The thing that makes both Brian and Carl”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Both DNA hi David had more experience than Andrew, but they're both DNA hires, primarily DNA hires. It's not either or. It's what's sort of primary. So for example, Carl Eschenbach or Brian Halligan for that matter. More experience hires, but the reason they work is because their DNA. Both Carl and Brian have resumes that are kind of one-to-one, right? Like Carl ran VMware from $40 million to $7 billion of revenue, now he runs workday. Brian built a company from zero to two billion of revenue all the way from PLG up to the enterprise, Act 1, Act 2, Act 3, a lot of good strategic decisions. Those guys are amazing based only on their experience. The thing that separates them from other people who have similarly amazing experience is their DNA. They are just very special human beings. The way that they interact with founders, that is the thing that makes them so effective, which I don't think people necessarily appreciate.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Things that you want. You know that you're supposed to keep it short, but you end up with 17 things on the list because everybody has their pet rocks that they want to include, and you go into the hiring process and you come up with a candidate and you're about to make a final decision on the candidate, and then somebody says, but wait, but wait, they don't have a CS degree. And you go check your list, and it turns out that none of the seventeen things says CS degree. But somebody thinks that's really important. You know, they didn't get to put together the list, and so now they're going to block the candidate. So on the art side of it, you need to figure out what are the few things that are absolutely essential and make sure that the person absolutely nails those things and everything else is nice to have.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“That was a good process And to read Matwong both started on our team in February of twenty fourteen, and so the process that led to them was conducted over the back half of twenty thirteen, and it was about the most rigorous hiring process we've ever had. Top of funnel was nine thousand and what came out the bottom of the funnel was Andrew Reed and Matt Hong, which is pretty spectacular a couple of outputs. So I think one lesson in hiring is it is a process like any other. Yes, there's some art to it in terms of trying to really understand people, but there's also a lot of kind of science process management aspects to it, you know, just set it up to be a very efficient process. If you maximize top of funnel, that is one of the best ways to make sure that you're going to be happy with whatever comes out the other end of the funnel, right? So I think that's probably one big point. The second big point, which is around the kind of art piece of it, and this goes back to what we're seeing earlier about how I've been trying to get better at sort of understanding people. Most of the time when you go into a hiring process, you have this list of”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, you're talking about people I hired, so sliding by. It's quite right. Andrew, hats so good at finding 23-year-old analysts from Goldman Sachs. He's really good at that.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I think what we're seeing is technology ecosystems that are more geographically isolated than we might have expected. And there's a lot of interconnectivity, but it's not just a single global technology market. To be clear, I think our partners in those regions did a fabulous job of building their respective businesses and reaching the conclusion that these are going to be isolated technology markets, probably could have reached that conclusion sooner than we did. We just wanted to make sure that for a decision of that magnitude, we were getting it right versus being reactive.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“In two thousand five, when we got into India and China, we did so with the thesis that the world was getting smaller. And when we parted ways in 2023, it was because that thesis in some ways had been invalidated. Maybe we could have done that a few years sooner.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“It is absolutely the right question to be asking. I'm a big fan of fewer better things. It is good to experiment because if you don't experiment, you're not going to be on the bleeding edge You're not going to be the ones defining the future. You're going to be getting dragged into the future by somebody else who's defined it for you. So I think it is good to experiment, and I think that we've experimented aggressively, and I'm a big fan of that. I also think it's really important that the default for any given experiment is that it gets killed. Burden of proof is on the experiment, right? Unless it is a wild success, shut it down. Most companies say, well, unless it's an abject failure, we'll just keep going. No, unless it's a wild success, shut it down. That doesn't mean it's going to be a home run right out of the gates. None of the experiments that we've done were home runs right out of the gates. But you could find something in there that allowed you to craft your thesis for why it was on the track to being a wild success.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Tell. There are some really good companies that are starting to come out of ARC, and so I'm optimistic that it will also make money for LTs.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I think Ark has been a wild success. There are only two things that matter number one, do founders like it, number two, does it make money for our limited partners? On point number one, do founders like it? Overwhelming success. The NPS of the last batch was quite literally one hundred, and so the NPS on this thing has been very good. We're getting a lot of referrals. If we go through and say, okay, well, are they the right kind of founders who are applying to this? There are a lot of great founders. We've run into a lot of companies later at the Series A or the Series B that were hunting, and then we go back and look, and it turns out they applied to Ark two, three years ago. And so we're actually attracting really good founders, and we get a lot of value out of the program. So that's huge. The one-liner that they've said, which is my favorite way to encapsulate it, is other incubators or other accelerator programs teach us how to raise our series A. Sequoia teaches us how to build a business. That's the words of our founders, not the words out of our mouths. So that's kind of point number one, founders like it. Point number two isn't going to make any money for LPs. The truth matter is time will.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a lot better for growth than it is for early. It's a lot harder to get those signals out early, which is why we have the ARC program. We're now getting thousands of applications every time we have a new batch for ARC, which we're now doing a couple times a year.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, yeah. It's not exposed externally. It's just something that exists inside the building. Occasionally, we'll use it to help out founders, but for the most part, it is an internal tool that makes us more efficient. We don't want to get to the point where the technology platform is pumping out buy signals.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“And we have to react to that as a business. One way to react is to staff up the investment team, right? We could have 100 investors. We chose not to do that because what we want to do is concentrate the experience, concentrate the knowledge in the smallest possible number of people so that when one of those people happens to stumble across the next Fred Letty, the next Todd McKinnon, the next Brian Halligan, they're going to give that founder the sort of outlier experience they deserve. So we wanted to keep the team as small as possible. The thing that we can scale is the platform. So those front office operators that I mentioned. And that platform, it amplifies our efforts as investors. It also is an opportunity to build advantages that can compound over time. And the most obvious instantiation of this is the technology platform and the data science system that we've built, which has signals that get better and better over time.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, first off, on big teams, you know, when I joined 17 years ago, we had 14 investors. Today we have 27. And so that's less than a 2x, you know, 17 years. So our team is fairly small relative to our market presence. The thing that has changed a bunch is when I joined, we had two people that I would call kind of front office operators to not compliance, finance, all that good stuff. But two people, one in marketing and one in talent. That number two has grown to almost sixty today. And so that's where we've really invested. And the reason we've done that is largely a reflection of the market. One of the nice things about technology, it's kind of this democratizing force, right? A founder could come from anywhere in the world and focus on any vertical. And so the venture capital market is subject to something that people used to use in relation to the big data world ten years ago, and that was a thing, which is the three Vs, volume, variety, and velocity. There was a higher volume of founders coming from more places, coming at us faster than.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“He's been Funny. I actually learned to eat faster because I used to travel with Doug so much and we would try to squeeze in food in between meetings and he'd be done in 30 seconds and I'd still be sitting there. So I actually trained myself to eat faster so I could keep up with Doug when we were on the road.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I don't think people have gotten to see what made Doug so effective ten or fifteen years ago because the thing that made him so effective ten or fifteen years ago was he was the tip of the spear. He wasn't the guy who got parachuted in later to play the role of senior big dog and impress upon the founders how important they are because hey, the big dog is here. That's more what he's been asked to do recently. Ten or fifteen years ago he was the tip of the spear. He was in the first meeting, he was leading the charge, he was asking the questions, he was doing the work, and in that capacity he was the best there's ever been, because he would fully, fully, fully commit to being present, understand that person to a degree that nobody else has ever understood them, understood their business to a degree that nobody else could possibly achieve in forty five minutes. And by the time that conversation was over, there was no question that they wanted to be in business with him. Doesn't matter who else comes into the room.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“I honestly don't look at public stocks, even the ones that you're responsible for. We still own a bunch of Snowflake. We own a bunch of amplitude. We actually own a bunch of Data Dog. I really don't check day to day.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“We invested fifty two million for twenty percent. And for anybody keeping track, that is 260 post on 25 million of ARR generating 20 million of cash.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“But we were sitting there, and Doug took out his phone, looked up a phone number. And while Fred is telling him this, he says, you need to call Marty Abbott. Marty Abbott was a guy who used to run technical ops for eBay. He's also somebody who helped us when YouTube started taking off. You know, 2005, we got a business with YouTube and all of a sudden the thing starts running. They had the same issue where they had to keep their servers up. So anyway, Fred calls Marty Abbott, Marty Abbott comes in, helps him out, solves the problem. And we had a couple more of those, and eventually Fred was like, okay, I guess it'd be nice to have you guys around. And so he created an opportunity for us to invest, even though there's no need for money in the company.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“He asked a gazillion questions. I can't tell you exactly how his brain works, but somewhere in there he is constructing a model of the human being and of the company, and so the questions don't go in a logical flow where you can kind of trace them from A to B to C to D. They kind of go all over the place, but by the time he's done, he has this very clear picture of who is this person and what is this company. And anyway, with ServiceNow, he teased out that they were having issues kind of with the back end of the business. And so this is 2009. People weren't building companies on AWS. You were doing managed hosting or you were using some sort of data center co-location, but you were basically responsible for your own technical operations as opposed to effectively outsourcing it to the public cloud. And because the product for ServiceNow was getting pulled into these huge enterprise deployments, it was sort of outpacing the ability of the back end of the business to keep up. And that was showing up in terms of latency and in terms of downtime. And that was kind of the main pain in the business. It was one of these pains caused by success.”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source
“This is actually funny because we didn't have a full set of financials from them, so we didn't know literally until the last slide in the presentation in the partner meeting on the day that we were going to make the decision when Fred was presenting the very last slide showed that they were generating twenty million of free cash flow. And that was on 25 million of ARR because they were getting paid in advance for two and three-year contracts. So they were unbelievably cash generative. Obviously didn't need to raise any money. The reason that they decided again to business with us, Doug and I went down to visit Fred in San Diego. We were sitting with him and Doug has this amazing discovery process where it kind of teases out everything that might not be going so well with the company, which is not the stuff they want to tell you about. How do you do that?”
2024-07-08 · The Twenty Minute VC · 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady · IDENTIFIED FROM THE TRANSCRIPT · source