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Roelof Botha

lines on the record: 130
first: 2022-08-31
most recent: 2022-08-31
sittings or episodes: 1
sources: podcast

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“We don't want to hire an army of people. Our investment team candidly is about unchanged over the last Only have about two dozen or so investors in our US and Europe business. Because if you want to make good investment decisions, you need to have small decision-making groups. You know, committees don't make great decisions because then you have average to the mean. And great investments depend on outlier instincts. And we are looking for the outlier founders, the founders who dare to build really exceptional companies, not just investable companies. So we've tried to keep the team small. We've also kept our fund separate. So we have a seed fund that's distinct from a venture fund that's distinct from our growth fund. And the teams are lined up against each of those because I think what you point out is a real risk that if you have, I'm just going to make it up. Let's just suppose you have one pool of capital, you have one $10 billion fund making a $500,000 seed investment and something promising seems kind of irrelevant. It's a rounding error. And then the whole team starts chasing what they think are bigger investments. And so that's one of the dangers that we've guarded again.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“So, if you think about the history of Sequoia's investments, when we invested in Atari or Apple or Cisco, where were the first investors? There were often single digit numbers of people around the company when we first invested. We invested in YouTube. There were three people. LinkedIn, there were seven people. Pala Alto Networks, one founder in our office, incubating him. If we start losing grip of that early stage of being in touch with the entrepreneurs right at inception, that's very dangerous for us. There's this temptation to then drift downstream and become a late stage investor. And so that's probably one of the most important things we talked about in our venture in the off sites is we've got to make sure that we stay at the fountain head of company formation.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“We cannot rest on the past. And it's part of what motivated me when I joined Sequoia, by the way. The motto we have inside our building is you're only as good as your next investment. And I saw that hunger and determination from people like Michael Moritz and Douglone, who clearly made it in life, and yet they were relentless in the pursuit. So very important for us as a team to think about hubris. Need to make sure that we continue to meet companies at the earliest stages of formation.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“By the way, the long live, you know the sequoia tree is the longest-lived tree in California. And that's the reason that Don chose to name Sequoia Sequoia. It wasn't an accident. He wanted the partnership to outlive him with a lot of consequent behavior and actions. And he also wanted us to invest in companies that stand the test of time, which I think we've done disproportionately. So, you know, there are a couple of things from the offsides. I think one of the most important ones is hubris, the downfall of every Greek tragedy, and the extent to which we rest on yesterday's success. One of my favorite quotes is no wreath wilts as fast as one that's rested on.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Every two years I think every year is too frequent because things just don't change that often. I mean, we may revisit something if there's something that's really changed. A why now is one of the questions we'd love to ask. Obviously, it's like, why now? So we made an off cycle decision to open up in Europe, for example, something we hadn't done for a decade. We kept on thinking about, should we open up an office in Europe? Should we be on the ground? Instead, we kept on flying into Europe and we made some great investments, we were early investors in Unity and Klarna and several other companies on the continent. And at some point, we realized There's just so much company formation happening in Europe. And especially after the global financial crisis, there's a whole crop of young people in Europe that now aspire to building companies when that wasn't the case before. So we revisited our assumptions and changed, and that was an off cycle decision.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“You can spend all your time scurrying around doing all the busy work if you're not focused on the things that will really compound and matter over the next five to ten years, you're missing the boat. And it's the urgent important trade-off. It's all those things woven into a very practical exercise.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Didn't go the way you wanted to. What does that look like? And so we've taken that concept. We actually use it in our investment memos. So for every investment we contemplate, we write a pre-mortem and a pre-parade. And when we've had strategy off sites for ourselves for the Sequoia Capital Investment Team, we did this too. We had a pre-mortem. We literally said 2030 autopsy of Sequoia Capital and what went wrong. What are all the things that are going to cause us to not be a great firm in the future? And the value of this exercise is, again, back to the insights from Don, it really crystallizes first order issues.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Correct. It was actually a technique that I picked up from Larry Summers for my Treasury Secretary Summers is on the board with me at Square. And he actually joined pretty early. He's been on the board for almost a decade with me now. And he posed this as a challenge to the management team at Square about imagine things. Write it down. Don't just think about it. Write down what that looks like, what does success really look like? What does the company look like? What have you achieved? Which markets do we operate in? Which products have we shipped? Then go write a pre-mortem.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“They were just so incredibly concise and describing the feedback that he wanted to give about a company or when he interviewed people. I saw some of his interview notes about people. Instead of writing two pages of notes about the interview, I was just so crisp and on the point. And so his ability to distill things very concise is incredible.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Incredibly good listener. You think about the stereotype maybe of an investor who's fast talking and needs to be heard. Don was very comfortable sitting for an hour and just listening. Absorb And then he was very precise with his questions, precise with his notes. I remember receiving a note in my inbox from Don. I was confused initially because there was no to or from. So I didn't know who'd written me this note. So I walked around the office saying, who left this for me? And people looked at it and said, it's written in green ink. Done. So Donna had exclusive use of green ink in the office. No one else was allowed to use a green pen. He loved the color of money. But he would take a full page and there may be 10 words on the page.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“And he's absolutely brilliant. He was gold medalist in our National Science Olympia, and he came to Stanford. He studied physics, electrical engineering. And in 2002, his sister had a baby that died within a week of birth. And he was shocked at the state of prenatal testing. And he went back to Stanford and he learned everything he could about biology and genetics and started this company Natera, where I'm still on the board 15 years later. We made a million dollar seed investment in him in 2006, just an idea. And today they deliver millions of tests to help people have healthy families. But it started with an incredibly authentic inspiration for him, which is seeing what his sister had to deal with.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“So distinct that it has a chance of flourishing and becoming a real business. So I can tell you one specific story. There's a founder, Matra Binovitz. He and I met in high school in South Africa in 1987 at a nerd camp. It was actually called an academic vacation school, but I mean, that's just a very nice way of saying nerdcap.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Well, first, it starts with an authentic identification with a problem, that founding inspiration. Because if you run to start a business for the sake of starting a business, it's so hard. There are so many challenges on the way to building a successful company. If you're doing it for the wrong reasons, you're going to wilt. You simply won't persevere. But if you're deeply motivated by what you're doing, you'll keep going and you'll overcome obstacle after obstacle. And so that to me is one of the key starting conditions is found a market fit, found a problem fit. I love asking a founder and I meet them, how did you come up with this idea? What is the eureka moment where something snapped and you want to address this problem? And what is it about the current solutions that you must have evaluated that frustrated you that you didn't think was good enough? And then the next one is what's your unique and compelling value proposition? So having evaluated alternatives and deciding to build something, why do you think what you're building is...”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“And so the founding inspiration for Cisco was connecting the networks of the computer science and business schools at Stanford. And that's the founding story, right? Instead of just accepting the status quo. And so there's so many other companies we're back where this is the example, right? Jack and Jim started Square because there was a lost sale. I mean, these personal frustrations are just incredibly powerful. So when you think about a person who wants to take on the world and doesn't just accept it, that tells you a lot about what the founder is like.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“I think you have an intuition for it's exceptional, not so easy to give along with. And the reason it's, you know, when you think about the founder prototype or personality type, most of us encounter challenges in the world and we just let it go. This is difficult. This doesn't work. This frustrates me. And you just go, whatever. And you move on to the next thing. Founders are these people who don't accept the way the world is. They want to change it. They encounter frustration. And they do something about it. Going back to the Cisco example, right? The founders of Cisco were the heads of the computer departments for computer science and the business school at Stanford. And they were on different networks so they could send primitive electronic mail within department but not across campus and the two of them were romantically involved and we're getting tired of walking across campus to see each other. They wanted to, I'm not kidding you, this is like the first story. It's great. This is fantastic.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“And when I joined Sequoia, he was still around, still alive. He passed away two years ago. And very early on, he pulled me aside and he said, there's a two by two metrics of people we get to invest in. Exceptional, not exceptional, easy to get along with, not so easy to get along with. Your job today Roloff is to figure out in which of those four quadrants we normally make money.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“So, Don Valentine is one of the fathers of Silicon Valley, one of the fathers of venture capital. Don grew up in the semiconductor business. He was at national and Fairchild Semiconductor back in the 1960s. And he started Sequoia Capital in 1972. And we should get back to this later, but he made a very important decision calling it Sequoia Capital and not Valentine Capital. Don had an amazing career as an investor. He backed Apple when a lot of people were unsure about backing a barefooted, not well-dressed Steve Jobs. He backed Atari, he backed EA, he backed Oracle, Cisco.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Would generally advise against that as a career choice. I chose to work at McKinsey. I don't regret the decision I made, but for me it was, again, an opportunity to work with an international firm. I worked at McKinsey from 1996 to 98. So South Africa just opened up from sanctions. We'd had sanctions from 1985 till 1994. The country was starved for international talent. And so this international firm shows up. I could learn from people from all over the world and they would give me an opportunity to either study or to work abroad. So that was a lot of the magnetism for me to join McKinsey at that time. I think if you're already in the US, go do something a little bit more direct. The best business school is actually being in business is actually going to join a company and actually experiencing what it's like. So if that's your ambition, if you want to be a consultant, there's nothing wrong with that. But I think as a way of delaying difficult decisions about what might happen in your career, it's a play-it-safe decision.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Chance to go read the original YouTube investment memo, for example, but there were three founders, friends of mine from PayPal Days when we invested. I was the fourth person really to join the company when we invested. And there was a way of imagining what might happen if this actually works. What if it goes right? Because it's so easy to worry about all the things that can go wrong with every company. So I do think the training helped, but in the classic nature nurture debate, how much was I pre-wired to think that way or not? I don't know. These things feed on each other.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“It did honestly. As I said earlier, the actual degree is about financial engineering, sort of the mathematics of finance, if you will. And so in a very practical sense, when I was at PayPal, the techniques I'd learned were useful in understanding the fraud problem that was latent at PayPal. And we were able to catch our fraud challenges months before others did. And it's part of the reason that PayPal survived. But if a twist of history, that that training actually was very specifically helpful in that situation. But this idea of thinking long term, there's a great article or a concept about the time span of discretion. What's the horizon over which somebody thinks and plans? And I think part of what we try to focus on at So I think has made me a decent investor is just trying to think much longer term, not just thinking quarter to quarter or a year out, but thinking about the possibility of what might happen with companies down the road.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Could get a bursary to study for it. My family couldn't afford college, so I got an insurance company to actually pay for my tuition. And it was challenging. So what actuaries do, by the way, is they run insurance companies, pension funds, so whether that's life insurance or general insurance and are involved with the investment management for those companies as well. So think of it as a financial engineering degree. So technically I majored in actural science, economics, and statistics. So there's a heavy emphasis on mathematical statistics as part of the degree.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“I finished high school in 1990, the year that ANC was unbanned. And honestly, at the time, it was unclear whether South Africa would have a peaceful transition to democracy. If you'd looked at the history of most other African nations that had gone through this kind of a change from sort of a quote-unquote colonial past, the picture wasn't pretty. And so when I chose what to study, part of the dimension was, would it give me an ability to work and live abroad? And actuarial science was something where after you got your undergraduate degree, you'd study professional exams and become a British qualified actuary. So technically I became a UK actuary, which meant that I could work in the UK and Canada and Australia and a couple of other Commonwealth countries. And so that portability of my qualification was a really important decision point. The other one was the most difficult degree to get into.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Was probably the second most powerful politician in the country. I was named after him Literally, you know, the convention in the Afrikan culture was that the firstborn son gets the father's father's name. And so that's why I was named after him. But because he was so well known, it meant that I also lived in his shadow and I was often referred to as so-and-so's grandson. Always referred to as in reference to somebody else.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“So my grandfather was the equivalent of the foreign secretary for South Africa, and I think he served for close to 20 years in that capacity. He was ambassador for South Africa to Germany, to Denmark, and to the United Nations. In his time, he'd met Reagan and Thatcher and Kissinger, and these were the sort of people he interacted with. And he was a part of the National Party, the government that ran South Africa until the first democratic elections in 1994. My grandfather was an agent for change, even though he worked in the party that was the ruling party that had enforced apartheid. He wanted to galvanize change from within. So he was part of the group that announced the unbanding of the ANC in 1990, and he actually served in Nelson Mandela's first democratically elected government from 1994 till 1996 when he retired. So he was a very well-known, very prominent politician. By some measure, when I was a child growing up,”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Still use some of those. I mean, when I was in Sequoia, as you pointed out earlier, I had the 10 to the 9. I try to keep track of how I spend my time when I was in college. I would literally write down the time that I started studying down to the minute. And then I'd write down the time that I got up so that I would have an accurate tally at the end of the day of exactly how much time I actually spent studying instead of just thinking that I was studying and just loafing around the house doing nothing. And so I use Evernode to do that. I organize key things that I want to accomplish for Sequoia and for each of the companies that I work with. So I always have this running list of what are the key things you need to focus on, the most important, the three most important things you need to accomplish for a given company over the next, say, six months as a reminder of the most important things.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“I thought I needed there's a concept in psychology called a Ulysses pact, which is this idea that in the birth of Ulysses, he wanted to hear the siren, so he had all his soldiers, all his sailors wax up their ears, time to a mast, and that way they could sail past and he could hear the sirens and they wouldn't succumb to them. And so in psychology, the Ulysses pact is this idea that you make a pact with your future self knowing that your future self is going to be weak. And so my technique for doing this, not having read about psychology yet, was to put notes in front of my desk on the door, leaving my room and candidly all over my room, reminding me of what I was aiming for. And in high school, it was to be the top 10 in my state at the end of high school, at college. It was to be number one. And I would just put all these reminders of what my goals were. So if I was tempted to get up to go make a cup of tea or watch television or take a break, I would just see what I'd written to myself. And I'm reminded of what I need to do if I want to achieve.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“And the vast majority of them were on dialup. So by the time I joined Sequoia in 2003, we didn't even have broadband reaching 50% of the US population yet. So the numbers were still much smaller and technology didn't have the scale that it does have today. And so I just thought eventually get to a billion. Now honestly, I feel like it's 10 to the 10 that you need to strive for because technology has infuse so much of what we do.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“I didn't really have time to mention at the time things have changed a lot in the venture business. Technology has infused so much more of the world. I keep reminding myself when I was at PayPal in 2000, there were about 200 million people on the planet that had internet. 200 million.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Notepad was used generally for note taking, but it was really on Mondays in particular when we had a partner meeting where we would review all the decisions for a particular day. And that would be the notepad where I'd make notes about the companies that we were listening to, my own views on companies, what did I worry about, what I think was interesting. And so that was the most important day at some level. We referred to it as the Olympic Finals at Sequoia. It was the Monday partner meeting and the importance of getting those decisions right. And so that was the day where I needed to remember very acutely what was I striving for. So I've done this when I was younger, too. I don't know if you'd heard”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT
“Is accurate. When I joined Sequoia, it was clear that if I wanted to make it as a partner, you needed to produce meaningful gains. And I set myself the goal of producing a billion dollars in gains for the partnership because that would mean that I'd made it at some level. And so 10 to the 9, which is a billion, was my shorthand of reminding myself what I was striving for.”
2022-08-31 · The Tim Ferriss Show · #618: Roelof Botha — Investing with the Best, Ulysses Pacts, The Magic of Founder-Problem Fit, How to Use Pre-Mortems and Pre-Parades, Learning from Crucible Moments, and Daring to Dream · IDENTIFIED FROM THE TRANSCRIPT