Chris Sacca's True Unfiltered Opinion on Facebook and Softbank | Full Interview

1. 0:00 – 15:00

   (beeping) Three, two, one,…

   1. NANarrator0:00

      (beeping) Three, two, one, zero. You have now arrived at your destination.

   2. HSHarry Stebbings0:10

      Kris, my word. I've only waited seven years for this one. I've been so looking forward to doing this for such a long time. So thank you so much for joining me today, Kris.

   3. CSChris Sacca0:17

      Oh, man. Last time I saw you, we were in Stockholm-

   4. HSHarry Stebbings0:20

      (laughs)

   5. CSChris Sacca0:20

      ... sharing some Heinekens on stage at Daniel Ek's event, which is an all-time event. Uh, and so it's really fun to ke- to, uh, to catch up with you again, man.

   6. HSHarry Stebbings0:30

      Do you know what? I like to think that I'm a very logical and representable speaker. After a couple of Heinekens when I was about 18 years old, I was not so (laughs) solid as I should be. But I do, I do wanna start with a little bit of context. I always love this question, which is like, fundamentally, how did you make your first move into investing and what was the first check for you?

   7. CSChris Sacca0:49

      You know, the first check for me... I mean, I'd been doing deals on behalf of Google for a while, uh, and, and even before that at a company called Spedera. So where I was general counsel and... I don't tell many people I'm a lawyer, so we'll keep that between us. But, uh-

   8. HSHarry Stebbings1:02

      (clears throat)

   9. CSChris Sacca1:02

      ... but general counsel and head of biz dev and corp dev and stuff like that. And so... And then even before that, as a lawyer, I was adjacent to all these deals. I was watching other people do deals. I'd be in the room taking the notes when John Doerr was, uh, was receiving a pitch and stuff like that as his outside counsel. Uh, and so, so I was always close to deals. But the very first one I did on my own, uh, was a company called Photobucket, which we ultimately sold for 330 million dollars, which sounded like all the money in the world at the time. You know, Flickr had sold for like $25 to 35 million. And so to be able to 10X that with Photobucket was insanity. Uh, and, and we felt (laughs) just so lucky to have gotten that deal done. But that check I wrote was literally a credit card check for me. Uh, I didn't have any cash on hand. I was at Google and I was vesting, but I hadn't sold any stock yet. And so I literally, um, I went into that one with $50,000 of credit card checks. My second investment was Twitter. And that one was funny because Evan Williams was... I'd already been working with the company and helping them out, but Evan went and circled up investors for the round and he's like, "Hey, I've got you down for 25K. 25K good? Okay, I got you for 25K." And I now see, you know, now that I've got some money and I've been privileged, like why that's kind of the baseline number that people use. But at the time, that was incredibly material for me. And I was kind of embarrassed to admit that like, that 25 really mattered. So I'm like, "Oh yeah, 25 sounds great, man. I'm all over it." And then-

   10. HSHarry Stebbings2:32

       (laughs)

   11. CSChris Sacca2:32

       And then I ended up having to show up to the company on a regular basis because I needed that 25 grand back. And so I would just kind of invite myself to 164 South Park, let myself in and try and be helpful. Um, and that annoyed the hell out of Jack, but I, that was, that was real money for me. And, uh, and so, so that's how I kind of got into this. Um, along the way where it really accelerated was in 2005 while I was still at Google, Paul Graham invited me to speak at the first Startup School, and I, I made an impression there. It was fun. I mean, I think we really... I was an answer to helping them teach, uh, this new generation of engineers who were running their own companies and didn't have MBAs, I was an answer to teaching them how to speak to customers, how to tell their story, how to move pixels around their front page, uh, how to tighten up their funnels, that kind of stuff. And they were an answer to just my, um, just my longing to be back involved with small companies again, you know, the excitement of that and, and the applicability of my talents as a generalist. And so that's where it really started to take off. And s- and so when I, when I left Google, I didn't have a plan to be a VC per se, but I knew... I was excited by the opportunity to hang out with Paul and Jessica and be helpful to companies.

   12. HSHarry Stebbings3:43

       I mean, there's so many things for me to unpack there. The thing I do have to ask is, I had Doug Leone on the show recently, and his first three investments were three IPOs. And he said it actually distorted his mindset having three big hits early. When you look at your big hits very early on, Twitter being your second ever investment, did it distort your mindset and, and did it make it almost challenging actually moving forwards having such success so early?

   13. CSChris Sacca4:08

       No, I was lucky, and I'm gonna use some air quotes around lucky, to have had my ass completely handed to me in the public markets before then. So-

   14. HSHarry Stebbings4:17

       (laughs)

   15. CSChris Sacca4:17

       ... I very famously took my student loan checks for law school, told the school they hadn't shown up, cashed them and used them to day trade in the market. And so this is one of the reasons why I get so nervous about what I see in the Robinhood phenomenon. You know, like even as we tape this, the market's crashing. And I worry about so many people trading on margin 'cause I was that guy. Um, and at the time they hadn't built the margin requirements back into the online trading platforms yet. So I would take a thousand dollars worth of, of equity and buy a million dollars worth of stock and hold onto it for a week. And so the swings were insane. And, um, and at one point I was up $12 million after about 18 months. And along the way you start to think you're a genius. And then when you put your buddies into the stock, you know, they'll come back and be like, "Hey, I bought a boat, man. You're the guy, you know, like you've got it figured out." And you really start to believe that shit. And one buddy said, "Hey, you need to diversify." So I had two stocks that I traded and, um, ultimately those came crashing down one week in 2000, left me totally on my ass, $4 million in the hole with nothing to show for it. And so I had already been stung by that idea of it's, um... You know, when things are... W- without that kind of quote unquote "training" that came by way of tragedy, when things are going up, you tend to think it's correlated with your genius and talent. And when things are going down, you tend to think it's unlucky. And you learn over time to invert that curve, that when things are going, um, up, it's lucky. And when things are going down, it's some lack of talent (laughs) and you need to double down and hustle. And so, and so by the time I got into venture, I was very lucky that I had already, um, that I had already had that, that kind of, um, horrible experience, you know?

   16. HSHarry Stebbings5:57

       How do you retain an optimistic mindset then when you're wrong and you lose money or the deal doesn't go as planned to not go, "Ugh, consumer social's crap," or "Healthcare's crap," or "You name it's crap," because you've lost money there before? How do you keep that optimistic, fresh mind?

   17. CSChris Sacca6:14

       Well, it's funny. It was, it was a lack of optimism that cost me some money in the beginning when I met the Airbnb guys and, and I pulled them aside and I was like, "Look, somebody's gonna get raped or murdered and the blood is gonna be on your hands." And you know what? That's turned out to be true once they've had hundreds of millions of, of users of the site. Yes, some people are gonna get hurt. It's the law of big numbers. But I had let the bad case get in the way of me seeing the most obvious case. You know, most humans are good, most of these services are obviously gonna work. I mean, we, you know, I at once, we were, we were in an Uber meeting talking about how, um, there was this, you know, like I mean you see articles about this driver hurt somebody and so we dug into the data. First of all, half of the time it's passengers hurting the drivers.

   18. HSHarry Stebbings6:58

       Mm-hmm.

   19. CSChris Sacca6:58

       Um, and so there's this even split, uh, but the reason those articles get written is because thanks to Uber we know about them. We know exactly who was involved, right?

   20. HSHarry Stebbings7:07

       Right.

   21. CSChris Sacca7:07

       If you get assaulted by a cab driver, you'd never know.

   22. HSHarry Stebbings7:11

       (laughs)

   23. CSChris Sacca7:11

       Um, but the other thing is just the law of big numbers. There's so many damn drivers and passengers out there now. So many collisions between individuals is gonna lead at scale to some bad ones. And I, I once did some math and I, I can't make it up now but it was like Walmart employs something like two million Americans, you know, there's 35,000 murders in the country a year. I was like, "That means on any given night, a Walmart employee murdered somebody." You know?

   24. HSHarry Stebbings7:38

       (laughs)

   25. CSChris Sacca7:38

       I was like, "So, so we need to do something about this 'cause Walmart is employing murderers at scale."

   26. HSHarry Stebbings7:44

       (laughs)

   27. CSChris Sacca7:45

       And it sounds funny but that's just how the numbers work, right? If you really run the numbers, that's how it works.

   28. HSHarry Stebbings7:49

       I, uh, I, uh, totally got it, and so especially in terms of the law of big numbers. I do have to ask, you also said about the early, you know, the 25K check into Twitter there. I r- my question from that was actually more when you think back to that and that mindset of like, "Yeah, yeah, I can do that. Whew, that's a lot of money," and then now, how do you think about your relationship to money? Because you know, it always changes. How do you think about your relationship to money today, Chris?

   29. CSChris Sacca8:14

       Yeah. I, I think I'm lucky in that I don't feel competitive with other investors or other rich people. So I, I have a lot of friends who are tortured by it. Um, and they just, they have countless, countless dollars at hand but feel like they're, that the goal, the goal line's always moving and they need to keep up with somebody else. So, uh, I certainly look at it as, "What can I do with the money we have?" And, um, and luckily, um, we have all the stuff we want and you get to this point where, like in the beginning I made a bunch of money and I bought houses for family and, um, and multiple houses for ourselves and then my wife and I turn around and we're like, "Fuck, we're property managers." Like, that's all we do now is like our inbox is like, "Hey, this broke and this is happening and what do we do?" And I was like, "So we're just prisoners to our stuff right now." And, uh, and so, the, again, it was lucky that I kind of got into that early and realized like, "Oh my god." Like, and then you start to realize, you know, we're fortunate enough to go on vacations but we don't need to own that chateau. It's amazing. There's some incredible places in Europe where we love to spend time that you can rent and then when you're done, you walk away from them. And so, you know, you can live luxuriously and then not have to own it. And so, um, and luckily we're also not into big boats thankfully, so that's a great way to light money on fire. But for us, um, you know, I'm lucky that Crystal and I have been best friends since we met freshman year of college. We didn't date for 14 more years after that. But I'm lucky that we've grown up with this money together and the thing that we did that I think more people should do is we sat down when it became clear we were gonna make some money, and by the way, I didn't come up with this idea. I saw Evan Williams do it. When Evan Williams saw that he was gonna make some money, he went out and started interviewing rich people, um, and asking them for tips. And when I saw that he was doing that, um, like it was funny. The way I saw it once is I gave him a ride and he had this notebook and it flipped open to this page that just said, "Don't let anyone know your home address." And I was like, "What the fuck is that?"

   30. HSHarry Stebbings10:15

       (laughs)
2. 15:00 – 30:00

   Why, why is that?…

   1. CSChris Sacca15:00

      coding early. They have to take all the enrichment classes. They have to take the IQ tests. And it just gets like this ... It's this fucking insane treadmill. And I also see it take over my friends' lives, by the way, where they're like, "No, we, we can't possibly leave school, uh, you know, a few hours early to do something fun," because God, if they missed a few hours of school, their life would be over. And so-

   2. HSHarry Stebbings15:21

      Why, why is that? Uh, uh, is that their own insecurity? I'm just intrigued. Like are they-

   3. CSChris Sacca15:25

      Yeah, yeah. I mean, look, you see the same thing play out in sports, particularly in America. You know, when I was a kid, we used to just be able to play sports. Like, if it was soccer season, you know, I hadn't really touched a soccer ball till soccer season. You know, our team wasn't amazing, but we'd play against other schools, and then when soccer season was over, it was over, and you picked up your tennis racquet, or you played basketball, or you just, you know... You ran cross country. You were just on one of the other teams. And, you know, now, it's specialization. My daughter, when she turned eight, in her little soccer league, they were gonna have a draft. Like, I'm like, "You're drafting players to teams?" Like, it's getting that competitive now. It's crazy, you know. And, uh, our daughters are on the ski team here. We live in Wyoming, uh, in Jackson, and our daughter's on the ski team. And, uh, you know, the head of the ski program (laughs) told me, 'cause our, our daughter is just turning 10, and he said, "Well, now, you know, at this stage, it's no longer fun." And I was like, "Wait, thank you for telling me that ahead of time, 'cause we're gonna pull out of the ski team." But just being that candid, like, "No, this is the stage where it's no longer fun," I'm like, "Why the fuck would my daughter play a sport at ten that's just not fun?" Like, that's the whole idea behind playing sports. She's never gonna be on the US ski team. That's not our path. Good- God bless everybody who's going for that, but that's not our path. And so, I worry about this over-specialization I see for kids. And so for us, I think our kids growing up with some privilege are at higher risk for being assholes than average kids. You know, when Krystall and I look back at our life, we reflect on the jobs we had, um, just really tough, shitty jobs early on.

   4. HSHarry Stebbings16:54

      (laughs)

   5. CSChris Sacca16:54

      And we look at those middle class upbringings where we couldn't buy all the stuff we wanted, you know. And, um, and as lucky as we were, I think we were both, you know ... We both came from homes where both our parents were together and are still together and, um, and you know, they're, we, we never ... You know, we, we just, we were lucky, right? Born, you know, somewhere near second base, um, and so ... So, our kids are at higher risk 'cause they've just always had the shit they wanted. And, uh, and you know, we have the luxury of being around, and we always ... You know, we, we often have somebody around to help out, and, um ... And so, so we've overclocked raising them with a sense of gratitude and service, and you know, our kids are now, at the end of this month, they'll be like 10, eight, and six. So, they work in the stables, um, near our house for, uh, for a horse ranch. You know, they ... It's illegal, uh, by Wyoming law, but-

   6. HSHarry Stebbings17:47

      (laughs)

   7. CSChris Sacca17:47

      But they go over there and muck stables, and you know, and shovel shit, and lead the horses around, and deal with that. And I'm like, that is so wildly important to Krystall and me. And they work directly on our philanthropy, um, they work with us on ... Particularly the ones they can wrap their heads around, like Charity: Water and Donors Choose, where there's that real c- like, clear connection between what we donate and the impact it has for other kids. Because kids understand fairness. They may not understand the economy and how dollars work particularly, but they get fairness, and they get, um, inequity, and how it's just unfair that other kids grow up without access to clean water, or food security, or housing, or basic school supplies, or jackets in the winter. Um, and so, so for us, you know, our goal is...If my kids don't end up at a fancy college, that's absolutely fine with us. I, I think the world is suffering a shortage of awesome, well-rounded people who care about others. Because look, I mean, one of the things that I see happening in tech right now is we're all getting really good at fitness, right? Like, we're all really good at, at, at, um, we know how to work out, how to eat, um, you know, which supplements to take. Um, we're getting really good at accelerating our own personal knowledge. There's never been more available to read, to listen to. There's all the, you know, from, from, uh, talks that are available online to... 'Cause back when I got in the business, the only way you could learn from a venture capitalist is if you were lucky enough to be in the room with them. Now, they all blog and tweet and write and speak. And, um, and, you know, there's some really great tomes and great advice. Like, we're compounding the knowledge that's built. You're a big part of that, right? People come on here, they share their lessons, and young folks who've never been exposed to the business or folks who are in the business, but they can just compound and accelerate their learning. And so, we're all getting better at this shit. You know, we're getting better at w- I mean, I talked to a guy yesterday who, he was a candidate I was trying to land for a company. He was just stunningly smart about the business. I'm like, "How old are you?" And he was in his 20s, and I'm like, "How the fuck did you learn all this already?" You know? And he's like, "I just stay up all night and read and look and, and, and watch and listen." And so, but at the same time, we're doing all this stuff and we're becoming, like, achievers. Uh-

   8. HSHarry Stebbings20:00

      Do, do you, do you not feel like we're losing our humanity a little bit?

   9. CSChris Sacca20:02

      Yes, that's the point-

   10. HSHarry Stebbings20:03

       Like that's (overlapping conversation)

   11. CSChris Sacca20:04

       ... is we've stopped giving a shit about other people along the way. You know, so, so I believe, I believe in a meritocracy, but I believe that, you know, often despite the circumstances people are born into, whether they're born, you know, on, uh, you know, uh, into extreme poverty and, and, you know, or, or came from a first generation immigrant family, I mean, those are inspiring stories. But I also believe that there are people who were born on third base who also have worked hard and created some of their own luck. But at the same time, like, I believe that, like I said, I, I may be lucky, but it's not an accident. But at the same time, friends I grew up with who just didn't work as hard maybe, you know, who like, played cards on Wednesday night, you know, when I was going to university for math, they have absolutely the same fundamental human right to be happy and healthy and to have a family and to enjoy themselves right now. And that's the fucking part that I think our culture keeps forgetting, is that I love when people go on their accelerated journey, and I do believe that those people who are that fortunate should enjoy some of the spoils of life. Like, eh, whatever they, you know if, if going to, on a fancy vacation or drinking incredible wine or driving a super fast car is their thing, I'm actually not like, a complete socialist, you know, that people shouldn't enjoy those luxuries. I certainly fucking do. Um, and so, but on the other hand, we have to pay attention to the consequences of the economies we're building and the consequences of our policy and who we're leaving behind. And it's just super fucked up. So yes, what happens is we have this monoculture of these kids who've, in computer science programs now, they've never had a job. Like, the toughest job they've ever had was being a teaching assistant for a class. And so they've never mowed lawns, waited tables, worked in any service industry whatsoever. And so as a result, they're completely out of touch with the human condition. A lot of them, particularly kids from America, have never studied or traveled or worked abroad. They've never been exposed to people who aren't like them. They've never been exper- exposed to poor people, let alone people of, of, of, uh, of color or who don't look like them. And so th- we build these products of monoculture and they're not informed by our worldly experience at all. And so, it drives me nuts. You know, we, we in our organization will only hire people who, um, who have had shitty jobs, who've had service jobs, who've worked extremely hard for, um, for some point in their life, and who appreciate that the worst day of being a VC doesn't begin to c- compare to the worst day (laughs) of working in a kitchen of a restaurant or the worst day of being on a construction site. You know? Um, and so it's not even fucking close. Uh, and so I, I do worry we've built this culture now that's like, "Hey, here's the, here's the keys to unlock to get your kid to fucking Stanford and be another amazing engineer," et cetera, but they're shitty kids. And I see it all the fucking time. I see my peers' kids talk back to people, are entitled as fuck, don't know the word please and thank you. Get, you know like, some other kid gets hurt, they don't know how to stop what they're doing and go check on the kid who just got hurt on the playground. They're just assholes. And so, I think (laughs) we're, there's a crisis. I think we have this surplus of assholes coming down the pike right now.

   12. HSHarry Stebbings23:12

       (laughs) Can we just give these kids back? I think-

   13. CSChris Sacca23:13

       Yeah. (laughs)

   14. HSHarry Stebbings23:13

       ... this is the question. Like, Bezos, will you take a refund on these ones? (laughs)

   15. CSChris Sacca23:16

       I quite liter- Okay. I quite literally was walking out of an event yesterday and there was a mom and dad and two boys walking in front of us and, um, and the boys were just being shitty to the parents. And the parents are like, "Okay, don't do th- Oh, you're running across the road," et cetera. And I said, I said, she, the mom was kind of walking next to me and I was like, "You know, some days I'm, I just feel really blessed to have three badass girls who, who actually listen to directions." And she turns to me and she goes, "Take me with you." Like (laughs) it's just like, it's just, we have this crisis. And I mean, a lot of it, I, one of my favorite books by the way is How to Raise an Adult, uh, by Julia Lythcott-Haims, who, who was both the Director of Admissions at Stanford and the Director of Freshmen, or the Dean of Freshmen, as well as a parent of a young kid. And so she talked about seeing the consequences of helicopter parenting and how it's ruining a generation of American kids. And in parallel, finding her, you know, not preaching from a pedestal because she found herself guilty of the same kind of parenting of her young kid. And it's an incredible book for anyone raising kids right now, but we're doing them an incredible disservice by bailing them out of every situation, giving them a participation medal.... our kids do karate, and their karate instructor is like a zen master. He, um, because-

   16. HSHarry Stebbings24:27

       (laughs)

   17. CSChris Sacca24:27

       ... on the very first day, he was teaching them how to count in Japanese. And he would say, like, "What comes next?" You know, and they'd say, "Ichi." And, um, and he would, one kid would say it faster, and he would say, "You win." And then he would go down the line and just say, "You lose, you lose, you lose, you lose, you lose." And I could see our kids squirming because nobody tells kids, "You lose." And other kids would be like, "Fuck this," and run out of the room. And I, and like-

   18. HSHarry Stebbings24:50

       (laughs)

   19. CSChris Sacca24:50

       ... our kids were like, "Should we go back?" And I'm like, "Absolutely, we're going back to that class. That is the greatest fucking thing I've ever seen." Like, just a guy who's willing to say to everyone, "You lose. You lose." And I've seen it translate. Now, when my kids lose a board game, they're like, "Let's play again." But nobody's like, "Ugh!" You know, nobody cries. Like, they lose, and they're like, "Okay, let's run it back. Like, I think I can beat you this time." And it's awesome.

   20. HSHarry Stebbings25:10

       But you know what this makes, you know what this makes me think of though, Chris? And, uh, I'm getting on my pedestal now, VCs are fucking terrified of saying anything critical to founders because they don't want the founder to say something bad, they're worried about their reputation. The power has swung so much that no one is willing to say anything bad at all. And I'm sitting in board meetings going, "What the fuck? Someone needs to speak up." And no one says anything. Like, does this worry you as well? 'Cause l- it seems like VCs just lost their voice.

   21. CSChris Sacca25:37

       It's an, it's an exceptional point, and it's true. Uh, one thing I wanna counterbalance it with is, VCs actually have way less power than people think they often do. You know, I go back to when everyone was like, "Why didn't you fire Travis?" And I was like, "'Cause, there was no fucking way we could."

   22. HSHarry Stebbings25:51

       (laughs)

   23. CSChris Sacca25:51

       You know? Ultimately, we'd come up with some kinda crafty ways that we could convert our stock from preferred to common, and maybe take over the board. That was risky, and we weren't totally sure. In the end, what pushed Travis out was when his team held him accountable, was when the, you know, his 13 senior managers all wrote a letter that said, "Dude, you gotta stay out of the company."

   24. HSHarry Stebbings26:10

       Mm-hmm.

   25. CSChris Sacca26:10

       And so, you know, that's, that's really the only force that Silicon Valley leaders are accountable to. I mean, Zuckerberg doesn't, has zero fucks left to give. In fact, I think he might even derive pleasure from public criticism of him. You know, it might reinforce his worldview that the rest of us don't fucking get it. And-

   26. HSHarry Stebbings26:27

       (laughs)

   27. CSChris Sacca26:27

       And so...

   28. HSHarry Stebbings26:27

       Right.

   29. CSChris Sacca26:28

       But when his employees start pushing back on him, that is the number one hardest resource in all of, of tech is if you can't recruit and retain good talent, you're powerless. And so, you know, it'll be interesting now that Mike left, I, well, let's see what that meant actually. Was he just, you know, did he wanna go hang out on a beach, or was there something greater to that? It'll be interesting, and we'll see if there's more departures there. But when your, when your employees won't stick around, that's the only thing that keeps you honest. That, you know, Larry, Sergey, and Eric had a pretty strong compass, but there were times back in Google, and so I'm talking, like, literally '05, '06, where we had to decide what to do about, uh, about China. And employees would stand up at the all hands meetings on every Friday, and ask really pointed, critical questions and say, "Look, if we're gonna do this shit, if we're gonna censor search results," et cetera, "I don't wanna fucking work here anymore." And that is, uh, I mean, we could, anyone from the policy group could've stood up and been like, "Well, I mean, I think this is how we should handle it from a geopolitical perspective," and Larry and Sergey would've been like, "Fuck that." But in the end, it's, it's the talent. If they're like, "We don't wanna work here, we're not gonna be proud to work here," that's what polices that, right? And so, so yes, like VCs, I do think are afraid of being critical, and I do think are afraid of pushing back. And, um, there are obviously standouts. I've watched Bill Gurley knuckle up in board meetings and call bullshit, because that's the place it needs to get done. And if you don't build that rigor and discipline early on, you're not setting yourself up to be a world-class company. And I definitely, I really look up to Bill Gurley. I consider him a friend and a mentor. Um, but, but honestly, I, uh, I do think there's some skittishness. And part of it's because I think a lot of VCs are shitty managers, you know? I mean, it's, it's funny. I mean, Clay, our business partner, um, and who kind of leads Lowercarbon Capital day-to-day on the climate side, um, knows that, that there are days where I'm gonna call and it's gonna be fucking harsh, (laughs) you know? That, that I love him to death, and I, I couldn't be more impressed by a single individual we've ever worked with. But there are days where, like, the disappointment meter goes high, and he's gonna fucking hear it from me. And, um, and so, I, you know, I, I, I think without that radical candor, people are setting themselves up for failure.

   30. HSHarry Stebbings28:46

       Uh, help me out here. I, I have the same, you know, I, I built out a team with my new funds, um, and the disappointment sometimes does hit and you are pissed off. And I, uh, I don't know the right way to do it. Like, how do you relay that? What is right? What is constructive? Help me out here, Chris, learning from you.
3. 30:00 – 45:00

   (laughs) …

   1. CSChris Sacca30:00

      and I'm not gonna try and fix it yet. I'm just gonna sit and wallow in it with you." And sometimes when it's a little kid, you literally crouch down to their height. But when it's an adult, you know, when it's, when it's your s- your partner, like, the one thing we all crave is to be heard and validated, right? And we skip that. And particularly, I mean, for technologists, entrepreneurs, VCs, you immediately jump to the solution. And that, that can be a real detriment because the person just wants to feel like they were heard and validated, and that you feel their pain, and so you stop and just, "Ugh."And then the next words out of your mouth have to be a question, not a statement. So the next words out of your mouth are, "Huh." So with a little kid I'd be like, "So, hmm, what do you think would happen if we dragged that, you know, car out onto the lawn? Huh." And you build, you build a hypothetical that sets them up to succeed, that sets them up to have an answer, to lead them down. You may have a solution in mind, but you have to let them find it along the way. You can't impose it. And so this is a really big deal for me. Like, and it's funny, I mean, it literally came from raising toddlers. And people would be like, "Why don't your toddlers tantrum?" And I was like, "Because they start, you can see it, right?" You can see that, I mean, just kids have fucking huge feelings.

   2. HSHarry Stebbings31:14

      (laughs)

   3. CSChris Sacca31:14

      Like I'm a Calabrian, you know, like, I'm a, my, my, my ancestors come from I- Italy. I can fucking explode on a moment's notice.

   4. HSHarry Stebbings31:22

      (laughs)

   5. CSChris Sacca31:22

      So, so you get those initial big feelings, but then it's like, all right, how do we diffuse that and make sure it doesn't just become a screaming fit? And, you know, and no one, no one in your life is gonna stop crying, you're like, "Hey, shut up, stop crying." That doesn't work, you know? Just like no one in your company is gonna be like, "Stop whining." And so, so the same thing happens. I set that up in reverse when I wanna coach an employee. I express my feelings. And, and I don't have to do it enraged. I'm just like, I express them as, "This is where I think we fucked up," or, "This is the disappointment." And then I ask them, "So what do you think we can do going forward?"

   6. HSHarry Stebbings31:55

      (sighs)

   7. CSChris Sacca31:55

      And that gives them, that sets them up to succeed. That sets them up to own the solution. That sets them up, rather than like, "Fuck you, you fucked up. Don't let this fucking happen again. Shut the fuck up." You know, like, like, "Look, next time, this is exactly how you have to fucking do it, so fuck you. Hang up." Like, that's the least effective way to manage ever. And so, if instead I'm like, "Look, we obviously fucking ate this one right here." You know, and I try and say we, 'cause we're a team, and so I don't try and put it on somebody even if it's clear they are the one who fucked up. Like, "We obviously took the fucking apple on this one, and so, uh, and this is it. You know, this bothers me because it reminds me of something that, you know, means something to me personally," or, "I hate being in this situation. These are my feelings." And, you know, and I don't, I don't beat around the bush. Like, "These are my feelings. I feel fucking let down," or, "I feel like we just lost some of our competitive edge," or whatever. And then, "What do you think we should do about it? How do we prevent this from happening again? What should we do going forward?" Then the person who fucked up owns the solution. Like, I, I, you know, and so, so there's no shortage of big feelings. There's no shortage of rage. (laughs) But, but now I've set the other person up to succeed and headed off at the pass so it doesn't happen again.

   8. HSHarry Stebbings33:06

      Can I ask, one thing that I often think back to is Max Levchin, who you said on the show once, um, when, when it comes to people, uh, when in, uh, when there's doubt, there's no doubt. Do you agree with that? You've worked with some of the best people in the business. You've seen some of the best operators. Like, do you, is that right?

   9. CSChris Sacca33:24

      So does he mean... I mean, uh, obviously we have that principle, like if it's not a hell yes, it's a hell no. And so when looking at deals and looking at hires, but, m- I don't know, uh, I don't know exact- do... he, he may have also been-

   10. HSHarry Stebbings33:36

       If

   11. NANarrator33:36

       (laughs)

   12. CSChris Sacca33:36

       ... s- go ahead.

   13. HSHarry Stebbings33:37

       If you hire a partner and actually, "They're okay. Yeah. They're seeing some good stuff."

   14. CSChris Sacca33:42

       Oh, I have no time in my life for that shit. So, like, (laughs) my... So I work from home. My daughters run in and out of the room all day long. They sit in my lap often for calls. They're not in here right now 'cause they're in online school. But, um, but, so one, one consequence of that is they, they know how to swear when the time comes. Uh, and so-

   15. HSHarry Stebbings34:02

       (laughs)

   16. CSChris Sacca34:02

       ... it's not something I encourage, but they've just learned how to do it. I was, I was watching, uh, that e- episode of Ted Lasso with Roy Kent, who's, uh, you know the, the girl he's helping raise, uh, is swearing a little bit, and I laughed my ass off 'cause I was like, "That's what it's like working from home." Um, but, uh... Wait, remind me what your question was again?

   17. HSHarry Stebbings34:19

       My, mine was, uh, essentially if they're okay, not great-

   18. CSChris Sacca34:22

       Oh, yeah.

   19. HSHarry Stebbings34:23

       ... um, and how you deal with that.

   20. CSChris Sacca34:24

       Um, so one of my daughters walked into my office recently and, um, and she was sitting on a call with me where I was really frustrated by, um, another investor who I thought was fucking up the situation at a company, and I hung up with them. And our middle daughter walked in and asked the older daughter, "What was going on there? Like, dad Sounded upset." And she goes, "Oh, this guy was just being a B-teamer."

   21. HSHarry Stebbings34:49

       (laughs)

   22. CSChris Sacca34:49

       And (laughs) I was like, it was amazing, 'cause those words hadn't left my mouth in that call, but my girls had picked up on the, (laughs) on this idea of like, just don't bring half effort, you know? Like, just don't half-ass something. Like, like be all in or all out. And so for me-

   23. HSHarry Stebbings35:04

       Right.

   24. CSChris Sacca35:04

       ... the people who suck, it's, it's never a lack of raw talent. Like there's definitely people who are r- who, who have some raw talent and blow my mind. It's just, it's always a, a lack of, of effort and ownership. Like, I can't fucking stand... We, we had a, we have a guy who works with us, uh, like on our, on our house. And he was brand new to the job, and he did not have prior, like, physical maintenance experience. Um, and, uh, and so he came into the job totally green. And he was, like, kind of reading manuals and trying to learn stuff on YouTube. And, and I was, I was so impressed with him compared with other people we've worked with, because he'd be like, "Hey, I just, just so you know, I fucked this thing up earlier, so it's gonna be a couple more days. I got it wrong. I ordered the wrong part." Or, um, "Hey, I... Do you have any idea how to fix this thing? 'Cause I don't." I'd be like, "Thank you for asking me rather than fucking pretending." You know, like, "Let's figure it out," or, "Let's find the, you know, the, the gal who can." And so as a result, like for me, ownership is everything. Like, because I run, I run an insanely small organization. You know, at, at... I think we're six people now managing, you know, between the outside money and inside money, over a billion dollars. At the height of Lowercase, we were managing $6 billion, and we were three people. And so every one in my organization has to be empowered with way insane, outsize responsibility.And so, we have radical transparency. Everyone sees our decisions, so they can channel me or Crystal later and not have to bring that decision back up to us. But, but I have to believe that if I empower somebody and treat them like an owner and give them real ownership... So, by the way, I mean, our comp plan probably runs six to 10 times what the industry standard is, um, because I want everyone to materially... I want ev- this to be a life-changing event. If you're working for me in any role, I want it to be a life-changing event. Uh, and you'll fucking act like it as a result. Like, you know, Goo- Google taught me that. When they would share confidential information, they would share the board deck with the entire company on Fridays. Literally, they'd gather the entire company and show them the same slides they had shown the board on Wednesday. And, and that meant everyone from the most senior engineer and all the VPs down to the receptionists and security guards. And so, everyone shared that. And you know what happened? It was like four years before we had a leak come out of that meeting, because everyone was shown the respect of an owner and they rose to that occasion. You know, I previously worked in a company culture where they treated everyone like children and didn't, uh, didn't give them that benefit of the doubt. And as a result, they acted like children and they maintained (laughs) confidentiality like children. And so, I think people rise to that expectation. So for my team, we are, you know... And Clay, our partner, is one of the best hirers I've ever met. He came out of the Obama White House, you know, and where they really did put together one of the greatest teams of all time. And Clay will spend, you know, three to four months hiring somebody, a specific person. Um, and they'll do some work product and they'll collaborate on some stuff with us. And it's, it's funny, I'm a little impatient. I'm like, "We need some fucking help right now." And he's like, "I'm working on it." But ultimately, those people who come on board could run a fucking division, you know? Like, who, you know... And they're in their 20s sometimes or early 30s, and they are fucking unstoppable. And so I, um, I, I just have no time in my life for B-teamers, let alone C-teamers or D-teamers.

   25. HSHarry Stebbings38:24

       (laughs) .

   26. CSChris Sacca38:24

       And, and it, uh, you know, I say that not from, like, a position of privilege or elitism. It's just 'cause it can be fucking anyone. You know, we, we have, we have people who work for us in service jobs who just fucking bring it, who just show up and own their work and bring it. And I mean, if you can't tell, I'm very passionate about this, because it drives me crazy to see people who kind of just flop around and phone these fucking jobs in. Not only can I not hire them, I have trouble fucking collaborating with them. Like, I just can't. Like I'm, I can't fucking make time for the call. I can't make time for the fucking coffee if I'm like, if I see them fucking phoning it in. I'm like, "If we're gonna do this, do it all in." By, by the way, that's one of the reasons I quit for a while, was I didn't... I, I worried that, you know, the stage of life I was in, I wasn't gonna be able to fucking bring it. I wasn't gonna be able to be as obsessive as you need to be to succeed in this business and this industry and to be as helpful as I wanted to be. And so, that was one of the reasons I stepped back, um, at probably the height of, you know, our power or influence, when I could have raised as much money as possible and seen all the fucking deals. I stopped, um, because-

   27. HSHarry Stebbings39:28

       But, but, but wait-

   28. CSChris Sacca39:29

       ... I worried I was going to be a B-teamer. (laughs)

   29. HSHarry Stebbings39:31

       So, you worried that you were gonna be a B-teamer, but you, you weren't, actually? That was a wrong assumption, correct? Or did it prove to be true, and actually you needed a couple of years out of it, out of fund cycles? When you reflect, was that right?

   30. CSChris Sacca39:44

       Look, the people who succeed in this business, and this is not an endorsement, this is an observation, are not normal. Like, they, they don't have incredible balance. And so, they may, they may, like, make good time for family and good time for health and working out and maybe put vacations on their calendar. But their brains are obsessive. And so, and so there is not, like, intellectual balance in their heads. They're obsessive readers, listeners, askers of questions, absorbers of knowledge, triers of new things. And so, they're obsessive. And, you know, I, I, I know kind of most of my friends have to do something to fall asleep because their brains are racing. And so, they can't not think about things. My family laughs at me because those ideas come to me in moments and I, I have to carry the notebook to write them down. Um, and, you know, Crystal will be like, "Are you really fucking thinking about lithium mining right now?" And I'm like, "I can't help it." Like, I'm just, I'm thinking about, I'm synthesizing this shit I read and I can't keep my fucking mind off it right now, you know? Or like, you know, I'll be like, I'll say to one of my kids, like, "Hey, I have to stop to write something down." And they'll be like, "What are you writing down?" I'm like, "This, uh, nuclear fusion reflection I have, I have a question for one of my teams. You know, I read something. It just... And I just want to ask one of the teams, because I'm trying to understand this principle about plasma." And so, uh, and so, I think, I think people in this business are obsessive. Now, what happened for me was that I just wasn't that obsessive about this shit anymore. You know, like, we had a partner, um, who was like really into e-gaming and I'm like, "I kinda get it, but I can't... I don't give a shit, really."
4. 45:00 – 1:00:00

   Well, you know, back…

   1. HSHarry Stebbings45:00

      do something, you had that again with Lower Carbon. Talk to me about, like, the formation days there, the fundraise itself. How did that come together? I mean, you and Chris Sacker is like, "Hey, I'm Sacker, PayPal me a 100 billion." (laughs)

   2. CSChris Sacca45:13

      Well, you know, back at Google, I worked on, on... We didn't call it climate then. I mean, we were one of the largest energy consumers in the world. We were using more power in three US states than any other, any other consumer of power. And so thanks to Larry and Sergey, they were pioneers of like, "Look, we got to make this shit green." And we worked on efficiency because it was... We used so much power that inefficiency would hit the bottom line of the company. And so back in '03, '04, I was pursuing, uh, clean power deals, and I remember doing a solar panel deal with Andrew BB, who's now at Obvious Ventures. He was a solar, uh, entrepreneur at the time, one of the OGs of the space, and a guy I really respect a lot. Um, but, but... So we were really driven as a company to find, um, to really push the envelope of clean energy. And so, you know, as, as time went on, the climate crisis was obviously increasingly apparent. I live in the mountains, which are a much more fragile ecosystem than a lot of other places. And so you see it happening, uh, between fire and melting, and flooding and drought. It just, it's real, you know, the migration patterns of, of wildlife changing, the, the, um, the health of the rivers and creeks changing, and so... So it's right there in front of me. But, um, but as I was reflecting on what was going to matter to me, so kitchen gadgets weren't, but my wife and I were starting to do more stuff in, uh, criminal justice reform, sentencing reform, prison conditions, and, uh, as well as, you know, clemency and restorative justice. That was one thing that mattered to us. Democracy, and, like, trying to give our republic a chance of surviving that orange fuck and moving past that, and, you know, a fascist GOP, uh, was another obsession of ours. And so we helped rebuild the Democratic tech stack. Um, but, but along the way, climate was, was a big deal. And so we revisited it saying, "Can we use the thinking we have from the entrepreneurial journey to really accelerate this space? And what's changed, what hasn't?" You know, bless Dor and Vinod and these guys who went into climate early. Um, their vision was there and their passion was there, and I'm... And I deeply respect that they risked so much of their personal capital, but the unit economics weren't there yet. It was just too fucking expensive to start those companies, and they depended upon government subsidy to operate. So at the same time that they were investing in companies, they were hiring Al Gore and Colin Powell to go to DC and try and lobby. And that was a hard road. Um, but as we paid more attention... And we started actively investing in the space in, like, '17. Um, but not just actively investing, going and visiting all the labs, reading the books, and then calling up the authors. And that's one privilege you have when you're us, is that people will return your call.

   3. HSHarry Stebbings47:47

      Yep.

   4. CSChris Sacca47:47

      And so we, we met with the research, uh, institutes and the people working on the, um, on the philanthropy side, and the activists and the regulators, and just really tried to put together a picture. Um, and what we started to see was that the unit economics in this business had changed. It was more like what we saw with Y Combinator in '05, is that it used to cost millions of dollars to write your first line of code. What used to cost tens of millions of dollars to start your clean tech startup, now with shared bioreactors, with massive computing clusters, uh, rentable by the hour, with machine learning accelerating at the pace it is, it was just so much cheaper to start a climate company that would have massive gigaton-scale impact on the planet. Uh, uh, you know, an example, this guy, Anders...... came to pitch us Heart Aerospace. And he's a Swedish guy who was gonna build, uh, an a- a 19-seat electric airplane. And we're like, "Wha- uh, where's your team?" And he's like, "It's me." Uh, (laughs) and, and so we gut checked it with friends at Airbus and Boeing, and they're like, "Literally physically impossible, man. Not gonna happen." (laughs) And so we didn't invest as much as we should in retrospect, but we invested, and we stayed close to this guy. And he rented a big airplane hangar, but for the f- first, like, I don't know, year of the company, it was, like, him and, like, three or four teammates just sitting at their computers with the rest of the hangar empty because that plane was built in the computer. Machine learning so wildly accelerated how that plane was built that it existed in the computer before they started assembling parts. Fast-forward a couple years and, and not on the billions of dollars of investment it normally takes to develop an aircraft, but on the single-digit millions of dollars in this case, like, and, and I think we just did a round in the tens of millions, but, um, and, and up until that round, his entire company could fit in his 19-seat airplane. But, um, but he has, uh, you know, billions of dollars of actual cash-on-the-barrel orders, not LOIs but orders from the major airlines in hand for this plane that makes their routes profitable. Like, this plane, he has the plane in the fucking hangar. The engines operate, (sniffs) he has the fuselages, like, it's a real fucking thing, and so... And that just wouldn't have been possible before without billions of dollars of investment. And so we see this happen with, like, a company Solugen who's making, uh, industrial chemicals using enzymes instead of petroleum. These guys, like, their, yes, their first vat cost a lot of money, but they now are, you know... I don't, I don't know if I'm allowed to say, but their run rate is ridiculous, like... F- I'll fucking say it, like nine-figure run rate, like, their margins are like 50 to 60%. It's an unbelievable fucking business because (laughs) carbon's expensive. I mean, look, powering the economy the way we do today, we literally dig up old dinosaur bones and cart them places and burn them. That's an insanely inefficient and expensive process. And so even if you forget, even if you don't give a fuck about the climate, forget all the externalities and what it's doing to the planet, it's just fucking costly. And so if you wanna make more money, it's just cheaper to power whatever you're doing using the sun. And I don't just mean direct energy, I mean transportation, I mean building materials, I mean agriculture and food. Like, all of this stuff is just cheaper when you do it using the sun. And so that's why these businesses... And by the way, you know, when you're a VC, you look at that TAM, that total addressable market page, and you just flip past it, well, these are the biggest total addressable markets in the history of the fucking world. Because it turns out, like, the total addressable market is everyone who eats, and everyone who wants to move their body somewhere around the planet, and everyone who wants to live in a structure of some kind, and everyone who wants to flick on a light switch. That's our total addressable market. And so I got really fucking excited to see, A, this is a passion area for us, B, what we do for a living makes these companies better, and, and as we started to get the word out there... So we were very actively investing from, like, '17 till this year, and, um, and I told the team we weren't gonna raise money if and until we had the best deal flow in the industry! And it was this year that that became apparent, that as we took our deals to collaborative investors, because this is a space where you have to be collaborative, we start, they started asking us, "Where the fuck did you find this one?" And as we racked up more and more instances of that, I'm like, "We're fucking going out. We have the best deal flow, we're gonna fucking do this."

   5. HSHarry Stebbings52:01

      Can I be blunt?

   6. CSChris Sacca52:02

      Yeah.

   7. HSHarry Stebbings52:02

      Why, wh- why raise external money? You have enough money to fund it all (laughs) yourself. Like, why take external money?

   8. CSChris Sacca52:09

      D- I mean, look, I- I'm very lucky (laughs) I have lots of money, but I don't have enough to do this all myself. I mean, to do this right is gonna take billions and billions of dollars. These businesses are... The unit economics are there, but they scale faster than any business has ever too. Look, when you and I invest in an app or a website, like, we can have the very best business plan and the best intentions, and we can spend a year, sometimes two years building that thing, pushing, moving the buttons around, getting excited about it, and then on launch day, nobody gives a fuck. And, and it's this very binary (laughs) thing. And I mean, I, I get it, like, just some of this shit just doesn't work sometimes. What we're seeing in climate is our stuff works, and so it's a rush to, to scale it, to land those customers. Like, by the time we meet with somebody, usually their science is already palpable. We can... It's tangible, we can touch it, and so as a result, it's like, "How do we go to market?" And so what's interesting is these companies are more capital-intensive, but they also are able to tap project finance earlier, they're able to get loans and debt earlier in their lifecycle than... You know, I think Uber was like a $50 billion company before they were able to borrow money instead of dilutive financing, and so... But you need some deeper pockets to play in this stuff. And so, you know, we've got basically a billion dollars at work in the field right now, but that will be growing. I mean, we will, we will absolutely be... Uh, uh, I think for US security reasons, I can't tip what our future, uh, uh, plans will be, but, um, but I'm sure at some point we will be bigger.

   9. HSHarry Stebbings53:35

      Are you gonna make more money from climate than you are from tech?

   10. CSChris Sacca53:38

       Absolutely. I'll, I'll get way richer from this. I mean, we have... I have multiple companies in the portfolio right now that have the, the very, like, a- (laughs) like, they have a trajectory to being multi-trillion dollar market cap, and it's just, that's not... (laughs) Like, like, yes, we... I mean, look, we are in the business of curved lines rather than straight lines, and a lot of the naysayers in the business are still extrapolating off of the straight lines. Like, "Look, here's, here's where we are today, there's no fucking way that'll ever be big," and I'm like, "Yeah, but we are in the business of these, of these lines that bend upward at radical rates that some of the OGs in the space just can't wrap their heads around." You know, like fusion, so we have a handful of companies in the fusion space. Forever people have said nuclear fusion is 30 years off and it always will be. And so, and I just, I got in a Twitter fight the other day with a guy who's like, "It'll always be 30 years off." And I was just like, "You know, I deeply respect all the work you've done in the space, but you sound like someone who hasn't visited the lab in a while."... because that's not where it is. And I can't preempt any announcements coming from any of our companies, but I can assure you (laughs) it's, I, fuck, I, I overstep my bounds in terms of what we know, but I can assure you, it is much, much more near term than 30 years, like imminent, um, maybe now, who knows? So, uh, but, but it's been fucking fascinating to see these accelerating curves. And that's happening across cell ag, and it's happening across building materials. And, and by the way, the people we're selling to, I mean, our thesis is, I, guilt and shame aren't gonna change behavior at scale. The only thing that's really gonna get us there is offering people something that's better, che- uh, cheaper, faster, cooler, sexier, easier to use, easier to maintain. And so you're not gonna guilt China into stopping their use of coal, right? I mean, China, uh, bless China, they're a, they're a fierce competitor, but they're also not hard to understand. And so, like, if we give China a better option, they'll fucking buy it. And so, you know, when I go back to Solugen, the guys who buy their chemicals, a lot of them likely don't vote the same way the founders of that company do. But they just ask two questions, "Is it hydrogen peroxide? Is it cheaper?" And then they're like, "Okay, fuck it. I'll buy it." Right? And so that's who I wanna sell to. I wanna sell to people who, who, uh, we don't even, you know, they might even think that January 6th was a tourist visit to the US Capitol. So I wanna sell to those people because they're acting out of sheer self-interest. Because we've got, like, maybe 100 to 200 million people on the planet right now who think about climate when they make a purchase decision. I need to get seven billion more of those people on board, and I'm not gonna get all these people around the planet who are living moment by moment, day to day, trying to make, stretch their check to do that, to pay a premium out of just consciousness. I just have to offer them the better product that, as a result, that as, like, an incident to their, to their purchase decision, um, is, has a climate-friendly impact.

   11. HSHarry Stebbings56:27

       Y- you did say there about the accelerated growth, I, I, I have to touch on this before we do a quick fire, which is, bluntly, you know, we're seeing deployment pace like we've never seen before in venture. And I'm often questioning myself, Chris, where, um, you know, Bill Gurley, um, was the one that told me, um, "You don't wanna be the guy that stops dancing before Mr. Brightside comes on at the party."

   12. CSChris Sacca56:46

       (laughs)

   13. HSHarry Stebbings56:47

       Um, and I love that. Um, but, like, I'm, like, I'm looking at the industry, I'm like, "Shit, I should have discipline," and then no one else has discipline. Like, how should I think about this? And, and how do you think about this?

   14. CSChris Sacca56:58

       Yeah, it's not discipline. It's, um, it's, it's, okay, I, I think there's this fake discipline to these requirements that, that the industry somehow thinks have been imposed by LPs, and they may have been, and any, but any LPs who think like this are fucking backwards. And so, and I see this in decks, you know, my, m- Crystal and I are LPs in dozens and dozens of funds, because that was one of the ways we paid it forward, you know, and, uh, uh, to help kind of promote diversity in the industry, we backed literally dozens of first-time general partners who are, uh, women, people of color, and other underrepresented groups. And so, but we'd see these decks and they'd be like, "Okay, this is exactly how much I'm gonna own of each round. This is my deployment velocity. Um, these are the board seats I'm gonna take," et cetera. And every time, I was like, "Stop. Like, take that slide out." You know, I, well, uh, when I wrote my checks into Uber, they were out, they, they were too big, quote unquote, for my fund. And one of my LPs called me and I was like, "Look, I have conviction about some things, but this one I fucking know. I mean, it, so much of Uber came together in my fucking kitchen. I'm going in." (laughs) And like, "If I, if I fucking crash and, you know, and, uh, crash and burn, then it's on me, but this one I fucking understand and I'm betting the farm on it." Um, and I was right. I mean, I, I shouldn't take much credit for Instagram 'cause I kind of limped into that one. But with, with, um, 'cause I was like, "Photos? How much money can be made in photos? I don't know." I mean, we sold Photobucket for 330. How much money can you ever make in photos again? And that's hilarious in retrospect. But I'm, uh, you know, but I, I, so what I would say is, have a different type of discipline. I'll tell you my secret sauce. It's-

   15. HSHarry Stebbings58:32

       Yeah.

   16. CSChris Sacca58:32

       ... it's make sure that the best companies in the world can and want to find me. And so they, you know, I'm, I'll never be big enough that I can see every deal. Maybe I could pull that off in 2005 or 2006 when there weren't that many deals. But now I c- there's just thousands of deals. So I need the best ones to, to know who I am and to know my reputation for being helpful and to know what I can do for them. And by I, I mean our whole damn team. Like, and by the way, it warms my heart when they go right past me to the other members in the team who they know are even more helpful now in climate. So Clay and our head of science, Claya and Alex, like, when our team, and Kristen who just joined who's unfucking believable. And so when, when they know to go past me, that's, that warms my heart. But they just need to know, okay, look, the very best companies in the world need to know to find lower carbon. From those, I need to know that we have the talent to choose the very best of those. Like, we're very selective, obviously. We see way more deals than we'll ever do. Then we need to be able to go in and get ourselves meaningful ownership and participation in those deals. Like I, you know, it's, it sounds blunt, but I say in every deal, we have to give ourselves a chance in that one deal to get rich. And this is because I've done, I did YC deals back in the day where I'd put 25 grand in and I'd sell the company for, you know, $15 million. My 25 grand became 75 grand. I made all the founders rich, but in the end, I'm like, by the time I give that, you know, the profits interest of that 75 grand back to my investors, I've made like 15.

5. 1:00:00 – 1:09:09

   (laughs) …

   1. CSChris Sacca1:00:00

      And so, you know, and I just spent a month of my life trying to sell them to somebody, and I netted 15 grand. Like, I need to make sure every deal has the potential to change lives. Um, we, in climate, we specifically make sure every deal, uh, has more than a gigaton carbon removal potential. But then the last thing is, I deeply have to believe that we as a team can ensure that that, we can, we can materially improve the likelihood of success of that company. And if, because I've been a public markets trader and I sucked at it, like throwing darts at a board was a disaster for me. So I have to believe that when we do a deal, not only is it, you know, the great deals find us, we know how to choose the greatest among those, we have to own enough of them that it matters, and then we have to make that company better. And so that's what I, my advice to you is, like, I'm gonna outsource that formula. Do that.So you've got incredible deal flow. These great people know how to find you. You've built a reputation of how you can be helpful. You have to be selective. The discipline is around not just doing every deal that comes your way, but then doing the deals where you personally can de-risk something. Maybe it's moving it from 49% to 51% likelihood, but, you know, maybe you can't add 20% likelihood (laughs) to the success, but it's knowing-

   2. HSHarry Stebbings1:01:06

      (laughs)

   3. CSChris Sacca1:01:06

      ... you can de-risk it somehow and make it more likely to succeed. You'll feel fucking better, and you'll make more money.

   4. HSHarry Stebbings1:01:12

      Kris, we both know many VCs. Do you think VCs are actually helpful?

   5. CSChris Sacca1:01:17

      Uh, some definitely are, like Bi- all right, we'll just... th- we'll make this the Bill Gurley fan club show, but, uh-

   6. HSHarry Stebbings1:01:23

      (laughs)

   7. CSChris Sacca1:01:23

      (laughs) But I have a very specific example that comes to mind with Bill sometimes. And, and by the way, there are a lot of guys like Josh Kopelman and Rob Hayes, and, um, uh, I... fuck, I'm gonna piss people off by not naming a bunch. So I'm gonna stop and just focus on Bill. We were in an early Uber board meeting once, and we needed a CFO. And I kind of... I, I, I... they said, "Okay, we need a CFO." And I stop and I think, "Okay, like, who could be a CFO?"

   8. HSHarry Stebbings1:01:49

      (clears throat)

   9. CSChris Sacca1:01:49

      I'm thinking of, like, ex... old Google people who are, like, Director of Finance and maybe ready for a CFO level. And Gurley just opens up this dossier, and it has the resumes of six public company CFOs who are vetted and who want the Uber job. And I was like, "That's what fucking Bill Gurley does." Like, that's one of his many things. He does lots, but that's... that guy just materially increased the likelihood of success of this company on that fucking day. I can point to it. Like, that guy, you know, will go in. Uber was obviously becoming a huge marketplace. That guy will go in and do a ton of marketplace analysis, connect us to other big marketplaces to understand lessons learned and things they did wrong, and he will materially move forward the likelihood of success of the company by influencing the business strategy. And so, there's no fucking doubt. I mean, I think the best VCs are great at hiring. I'm not great at sourcing candidates. I'm good at landing candidates. So if you've got somebody who's stoked and they're on the fence, I can usually convince them to join your company. But, so-

   10. HSHarry Stebbings1:02:46

       How am I, how am I supposed to-

   11. CSChris Sacca1:02:47

       ... for the best VCs, it's not an accident. Like, it's not an accident that the best venture funds keep outperforming, right? Like, that doesn't happen by accident. And so, you know, there's, there's luck around the way. We can tell these stories and they make good cover stories. I'm like, hey, if this guy hadn't bumped into this guy, you know, or this gal hadn't, hadn't happened to read an article about somebody 10 years ago and wanna talk to them about it, but, um, but it's not an accident or just some mere coincidence that it keeps happening, because some of these people are fucking good, and they add value every fucking time.

   12. HSHarry Stebbings1:03:19

       Do you think success is cyclical in venture? You get... you do Uber and so you get Instagram. You do Instagram, so you get Docker. You do Docker, so you get... and it just continues and continues. Do you think that success really is cyclical? Doug Leone was like, "Fuck no. People don't just come to me with deals." But, um, I'm not sure-

   13. CSChris Sacca1:03:36

       I think, I think Doug was bullshitting. Uh, well, you know, like, Instagram came to me. B- like, Kevin Systrom literally said, "I want three angels, you, Adam D'Angelo, and Jack Dorsey." And so, he pitched me. I, I literally was not seeking photos. I... it sounds fucking hilarious, but I thought it was spent. I thought it was done. And so, he came and pitched me why he wanted me involved, and it was specifically because how I was helpful, and it was specifically, um, things he'd seen that I'd written too that influenced him. And specifically, when he was at Google, he was kind of a junior guy who'd seen the work I had done, and he's like, "So I want you in my deal." And so, that does happen. Like, that reputational thing matters. And by the way, to, to investors (hands clap) who are up and coming, I think you need to consistently remind other investors of wh- how you're helpful. So, you know, people are like, you know, "Saca, you're self-promotional." I'm like, "Fuck yeah, I am." Like, that's part of the job, is I have to continually remind people why I matter, because I need other investors to bring me their deals too. Like, this is inherently collaborative business. If we're not gonna see all of them... like, we see the most, but I'm not gonna see all of them. I need somebody, like, I needed someone at First Round Capital to be like, "Oh, this is a good deal where Sacas' skills would be complementary to ours, and so let's call him up and see if he wants to come into the deal." And I... and, and they knew my check size wasn't gonna displace them from their deal, you know, from there learning-

   14. HSHarry Stebbings1:04:58

       I think what's, what's hard though now, Kris, and I think, you know, you, you're in, in a lovely ecosystem now in climate, I think, right? But, I mean, the more the cash that goes in, the better. But VC now is less collaborative than ever. It's more transactional than ever. Tiger do more deals than I do fucking podcasts. Um, it's not... i- i- it's not the same place that it used to be when you... do you know what I mean? It's so different. I'm like... I don't know, I almost feel like a jaded soldier, and I'm like, "Ugh." Do you get jaded by that?

   15. CSChris Sacca1:05:27

       I mean, yeah, but remember, there's part of the market that, um... so, I encourage you to kind of go back and read the success stories of people, like, when they... like, read the Series B stories, right? It's fun to read the IPO stories, like, how did that deal come together? But to your point, those are, those were funded in a slightly different era. So read the Series B postmortems. So hey, how did that deal come together? And what you'll see is, the most selective, the best founders are still looking for quality, not building party rounds. And so-

   16. HSHarry Stebbings1:05:55

       Mm-hmm.

   17. CSChris Sacca1:05:55

       ... they may have more leverage in the situation, but they know that they want an actual helper to help them build a company. You know, so, it, so it was interesting. We recently, um, in, in Lilac, uh, co-led a round with TROW. And so-

   18. HSHarry Stebbings1:06:09

       Mm-hmm.

   19. CSChris Sacca1:06:09

       ... TROW has this incredible expertise in, uh, in minerals. And so, you know, we're in the lithium mining business, right? Their expertise is wildly complementary to our company-building expertise. And so, for us, it made perfect sense to split the round with them. And th- and the founders of the company were excited to have us come to terms with, uh, in a way that we could split the round evenly with TROW because it's like, look, we can help you build out your team. We can help you build this company from here. We can help you work on strategy. We can help you... I can help counsel you on your worst fucking days, right? When it seems like (laughs) your life is imploding, that's part of our value-add. But at the same time, like, these guys at TROW have such an insane in-depth understanding of the lithium market, down to which ships are transporting which beads at which time. And so, it's really fucking fascinating. And so, I think inherently... and, you know, we, we... in climate, like, we love doing deals with Breakthrough Energy. Um, you know, like, they have an intense level of expertise. And so, we'll do diligence and gut check our diligence with them and make sure that we leave enough room for them to materially participate. But this goes for all these fucking funds. And again, I don't wanna...... list them all, 'cause I'm gonna exclude somebody and hurt somebody's feelings. But we are insanely collaborative in that space. And it's the reason why, you know, like S- 50 Years Fund will bring us a deal and say, "Hey, look. Here's one we love." And as much as Seth has every incentive to deploy as much capital as possible, and get as much ownership as possible, he believes that if we are in his deal, it's gonna be a more valuable deal. And so, uh, and so, that's at the heart of all this.

   20. HSHarry Stebbings1:07:44

       I can ask one final one, and then we really should do a quick fire 'cause I (laughs) I'm aware that the 20 Minute VCs not 20 minutes. Um, but it's the final thing which is, you mentioned LPing into funds quite a few times. When you look back at the 75 or so that you've done, have there been some big takeaways for you from doing 75 LP checks and seeing 75 different managers?

   21. CSChris Sacca1:08:04

       Yeah. I think the number one, um, thing is, I don't wanna get credit for that as a philanthropic investment. Because in the end, I, I, I told everyone from the beginning, I was like, "Look, diversity in this industry, you can either, you can either hire diverse people for your firm, um, because you've, uh, you know, acknowledged there's been hundreds of years of systemic discrimination and women are making 72 cents on the dollar, um, and, you know, entire races have been shut out of the industry. Or, you can hire, uh, diverse team members because the data are clear that diverse teams just outperform monoculture. So either do it 'cause you're a hippie or do it 'cause you're Scrooge McDuck. But either way, do it." Um, and I have no allergy to money. And so, I, I am like, I go into the LP situation and I say, "Look, I mean, we can either invest in these managers because you feel bad and you wanna do something to help the industry and you feel like you owe it as a result of your privilege." And I'm not gonna talk you out of that. But also do it just because, you know, in a time where everyone's chasing the same fucking deals, we're now backing a generation of entrepreneurs, or of, of, of GPs who are seeing deals that we're not gonna fucking see.

Episode duration: 1:24:15