Michael Moritz, Partner, Sequoia Capital

1. 0:00 – 0:05

   Intro

   1. SPSpeaker0:00

      [upbeat music]

2. 0:05 – 1:29

   Early ambitions: from avoiding the rugby ball to discovering journalism

   1. SPSpeaker0:05

      Y- you've clearly had a very impressive career, but before becoming one of the top-

   2. MMMichael Moritz0:09

      That's not what my mother says.

   3. SPSpeaker0:10

      [laughs]

   4. SPSpeaker0:11

      [laughs]

   5. SPSpeaker0:12

      Before becoming one of the top venture capitalists in the world, being kn- knighted by the Queen, you were a boy from Wales. What did you wanna be when you grew up?

   6. MMMichael Moritz0:21

      Um, I actually... [laughs] not that this game or sport is played in America, um, and so it won't translate, I wanted to be a cricket player. Um, a cricketer, but I was a coward, and the ball was very, very hard. And, um, so I spent most of my time in sport, whether it was cricket or rugby, trying to avoid being anywhere near the ball, so, um.

   7. SPSpeaker0:44

      [laughs]

   8. MMMichael Moritz0:46

      Um, and I have a friend, actually, who became a spectacular rugby player. He played for Wales, which, uh... And I told him that the only thing that separated him and me on the rugby field was when he took to the field, he wanted the ball to come in his direction.

   9. SPSpeaker1:06

      [laughs]

   10. MMMichael Moritz1:08

       And I, of course, [laughs] wanted the reverse. I never wanted to see it come in my direction. So, um, but, and as I got a bit older, I, uh, became interested in journalism. And, uh, um, in, when I was at Oxford, it w- and I knew that I wanted to be a journalist when I was at Oxford.

3. 1:29 – 4:07

   Family refugee history and its lasting emotional imprint

   1. SPSpeaker1:29

      So I'm interested in the story of how your family came to Wales. It was, uh, quite inspiring that your parents actually escaped, uh, Germany during the Second World War, arrived in, in Wales as refugees, in the UK as refugees. How did their struggles and their experience shape you early on in, in sort of what you wanted to do with your life?

   2. MMMichael Moritz1:53

      Well, they, they were very lucky. They didn't escape during the Second World War, they escaped beforehand. Not many people escaped Germany during the Second World War.

   3. SPSpeaker2:00

      Mm.

   4. MMMichael Moritz2:00

      Um, and, uh, my, uh, father, um, um, left Germany, he was born in Munich, and, uh, uh, went to Britain, uh, when he was a 14-year-old. My mother went, um, on something called the Kindertransport, which was, um, 10,000 kids from Germany basically that were br- that were rescued and put in with, uh, uh, in, in foster homes. And, uh, they then, uh, met, uh, subsequently in Britain. And after the war, um, they, uh, they got married. And, um, you know, those are searing experiences. Difficult, and I'm sure everyb- you know, there are people here either who have, um, firsthand familial experience of something as disquieting, unsettling, and wrenching as those sorts of experiences. But, um, those are the experiences that come down through generations. My father's father served in the German army during World War I. He was decorated. He w- uh, and, um, my father's mother was a nurse in the German army during World War I. And then both of them, um, were killed. They were murdered, uh, by the Nazis. And, you know, my father died about 15, 16 years ago. Um, my mother, [laughs] whom I saw last week, is 95 and still vibrant. But those experiences, they color everything. They hang over everything like a, like a dark cloud. It is always the anxiety and the fear of the whole world being ripped out from underneath you, and, uh, and it, uh, and it colors the way that you live.

   5. SPSpeaker4:00

      Yeah. And-

   6. MMMichael Moritz4:01

      Understandably

   7. SPSpeaker4:02

      ... and that drives you today still?

   8. MMMichael Moritz4:05

      Well, I, I don't know about that.

   9. SPSpeaker4:06

      [laughs]

4. 4:07 – 5:08

   Growing up as an outsider in Britain and the effect on identity

   1. MMMichael Moritz4:07

      But, um, i- it certainly, uh, had a profound effect on, on my, on my parents. And, and, and they came to Wales as outsiders. And, um, obviously Britain, I owe everything, my parents owe everything to the fact that Britain opened its borders and allowed them to settle there. But it was not easy. They were, uh, in a minority. Um, uh, there weren't exactly... I mean, I was one of, um, I think, three Jewish kids at the, uh, high school that I went to. So I've always, you know, one always felt, uh, an outsider. And the delineation between religions in Britain, which is, you know, f- 40, 50 years ago was very, very sharp.

   2. SPSpeaker4:58

      Mm.

   3. MMMichael Moritz4:59

      And so if you didn't belong to the majority, it was very obvious that you were on the outside. So-

   4. SPSpeaker5:05

      Yeah

   5. MMMichael Moritz5:05

      ... that's obviously had a huge effect.

5. 5:08 – 7:52

   Why America: escaping 1970s Britain and Fleet Street barriers

   1. SPSpeaker5:08

      Well, you did them very proud. You worked really hard to get into Oxford. And I'm sure you had many opportunities professionally in Europe, but you decided to come to the United States. Why, why the United States?

   2. MMMichael Moritz5:20

      Well, I didn't have many professional opportunities in Europe, because I grew up in, um, the Eur- in the Britain that predated Margaret Thatcher. And, uh, uh, those were extremely difficult times, um, uh, in Britain. I mean, obviously Britain's going through its own issues today with Brexit, but the times in the 1970s, um, people who weren't around, and there's no reason that anyone here should, should know about it, but it was a strike-ridden, um, country, where you never knew whether the electricity was gonna work, whether there was gonna be a gas strike, whether the railways would run, or whether the newspapers would be delivered because there'd be a wildcat strike. And I wanted to be a journalist, and I wanted to work on Fleet Street, and I wanted w- to work for the Times or the Daily Telegraph or The Guardian or one of the big broadsheet newspapers that at that point dominated journalism in Britain. But because of union restrictions, um, the Fleet Street newspapers, the big newspapers, were not permitted to hire anybody straight out of undergrad. You had to go and serve a multi-year apprenticeship on small provincial newspapers.

   3. SPSpeaker6:38

      Right.

   4. MMMichael Moritz6:38

      And, um, I had no appetite in doing that. I just w- I wanted to work on Fleet Street. I wanted to sort of work in the Premier League, so to speak. And, um, I had a... I went to see a, um, a gentleman who was the editor of The Daily Telegraph, a fellow who... I mean, he was a Fleet Street legend and, uh, a character on whom Evelyn Waugh had based the novel Scoop, uh, which is hilarious if, if, uh, you've never read it. And he said, "If I was your age, get out of Britain, go to America."

   5. SPSpeaker7:13

      [laughs]

   6. SPSpeaker7:15

      [laughs]

   7. MMMichael Moritz7:15

      And that was the... That was what sent me to America, it was that sort of weird, peculiar encounter. Um, and I often think about that. That's, that's what made me up sticks and leave. I mean, well, you know, I... And I, I was lucky. I got a sch- I wouldn't have been able to come to America had I not got a scholarship because I didn't have the money and all the rest of it.

   8. SPSpeaker7:37

      Mm-hmm.

   9. MMMichael Moritz7:37

      And but I got lucky in that. And I came to America, this is 1976, not knowing where anything would lead. Um, but, um, have obviously [laughs] stayed here.

6. 7:52 – 11:12

   Journalism in the U.S.: Detroit, tech coverage, and meeting Steve Jobs

   1. SPSpeaker7:52

      Yeah, 40 years you said. So you started out, when you got here, as a journalist for Time Magazine-

   2. MMMichael Moritz7:58

      Right

   3. SPSpeaker7:58

      ... in San Francisco. Uh-

   4. MMMichael Moritz8:00

      Actually, not in San Francisco-

   5. SPSpeaker8:02

      Oh

   6. MMMichael Moritz8:02

      ... in Detroit of all places.

   7. SPSpeaker8:03

      In Detroit.

   8. MMMichael Moritz8:04

      Covering the first collapse of the Chrysler automobile company.

   9. SPSpeaker8:08

      Oh. And then you made your way to San Francisco to cover technology. And during this time you got to know Steve Jobs. What do you believe made Jobs such a unique innovator and leader in the time that you spent with him?

   10. MMMichael Moritz8:23

       Uh, so this is, again, this is a long time ago. This is 1980. And, uh, Microsoft was a company that I remember going to an event at, at Apple, uh, one of these sort of management events, small management events, probably this was 1982 or '83. And, um, um, Steve had a, a sort of fireside chat like this, and he asked the guest, a fellow who at that point was a Morgan Stanley analyst called Ben Rosen, who later went on to found a very successful venture capital firm. He said, "So Ben, pick the year when Microsoft, you think Microsoft will break the $10 million revenue barrier." Right?

   11. SPSpeaker9:11

       [laughs]

   12. MMMichael Moritz9:12

       $10 million and Ben was scratching his head. So it's a very, very long time ago. But, um-

   13. SPSpeaker9:18

       [laughs]

   14. SPSpeaker9:19

       [laughs]

   15. MMMichael Moritz9:20

       [laughs] That was the only point I was lamely trying to make. And, uh, but S- I, I realized I hadn't met anyone like Steve. Um, I'd spent time with a fellow called Lee Iacocca, who was a living legend in American industry at that point, and had been the president of the Ford Motor Company, and then became the CEO of Chrysler. And Steve was the first person whose salesmanship was on a par with Iacocca's. Iacocca was just mesmerizing character. But he didn't have the product and engineering attributes that Steve had. And obviously there was a difference in age of probably 35, 40... 35 years or so. Uh, but Steve was a spellbinder. And, um, I, uh, a- a- a- and obviously, uh, uh, as everybody knows these days, a, a very difficult and complicated character, but he was an extra- an extra... And even though I had lots of... I had all sorts of issues in dealing with him, have nothing but, you know, massive admiration, uh, for what it is that he eventually went on and, uh, went on and did. And, um, but as I said, it's a long time ago. And I think at that time I probably held a minority opinion of, of how spectacular an individual he was because later he was, again, ancient history, he was fired from the company that he founded, which to me always seemed like a real travesty.

7. 11:12 – 12:26

   Leaving Time: frustrations, career benchmarks, and starting a newsletters business

   1. SPSpeaker11:12

      So following your time with Time Magazine, you would make the switch to the venture capital industry by joining Sequoia, which is very uncommon. How did that happen?

   2. MMMichael Moritz11:24

      Well, I'd left Time because while I'd enjoyed four years or so as a journalist, I also got frustrated. It was a big company. I was working on the periphery of it. And sort of, for some reason it always felt I didn't wanna be a journalist if I'd... when I was 30 years old, and I had that as some sort of mental benchmark. Goodness knows where that came from. I think it was largely because, again, back then I saw what happened to people. It was eye-opening to me. I saw what happened to people who stayed in journalism and were 60 years old. And, uh, cer- certainly if they worked for Time, which was a sort of cushy job, but you got sent all over the world and you wound up, um, as an alcoholic.

   3. SPSpeaker12:04

      [laughs]

   4. MMMichael Moritz12:08

      Which didn't appear to me to be a really beckoning career trajectory.

   5. SPSpeaker12:12

      [laughs]

   6. SPSpeaker12:14

      [laughs]

   7. MMMichael Moritz12:15

      Uh, and so I left, and together with somebody else, I started a little company, um, that, um, published newsletters, staged conferences about the technology industry.

   8. SPSpeaker12:25

      Mm.

8. 12:26 – 14:48

   Breaking into venture capital: rejections, the list of five firms, and Sequoia’s bet

   1. MMMichael Moritz12:26

      And, uh, so much for my... And, and that fella stuck with it and e- uh, eventually many years later, no thanks to me, um, Dow Jones bought that company. And, um, uh, but I always felt it was gonna be a small company. And I had, through my work at Time, through my work at this little company, I'd met a lot of people around the technology industry, and, um, had met a lot of people in the venture capital business. Time had run a cover story that I had, uh, reported on, uh, that had... about the venture industry, that had Arthur Rock, who was the original founder of Int- uh, investor in Intel and then of Apple, on, on the cover, and, and during the process of that had, uh, met a lot of people in the venture business, and had always... And had... When I came to California, I didn't know anything about Silicon Valley, didn't know anything about the venture industry, and had got interested in it. And, um, and made a list of five firms, uh, where I knew somebody, wrote to them. You wrote to them in those days. You didn't email them. [laughs] And, um, got interviewed at all. Got rejected at, uh, four of them. Um, journalist, history major, no experience working in a Silicon Valley company, therefore totally useless.

   2. SPSpeaker13:56

      [laughs]

   3. MMMichael Moritz13:57

      Um, probably correct on most of those counts.

   4. SPSpeaker14:00

      [laughs]

   5. MMMichael Moritz14:01

      Um, and then Don Valentine, who was the founder of Sequoia, um, decided that, uh, he needed to do something to change Sequoia's image with minority hiring.

   6. SPSpeaker14:12

      [laughs]

   7. MMMichael Moritz14:19

      And so decided to hire a history major. [laughs]

   8. SPSpeaker14:23

      [laughs]

   9. MMMichael Moritz14:24

      And, uh, but it was a head-scratcher for most of Don's, uh, peers in the venture business, wondering why on earth he was wasting his time with somebody like me. And, uh, so, so that's how it happened.

   10. SPSpeaker14:38

       [laughs]

   11. MMMichael Moritz14:38

       It was great good fortune. I... If Don had said, uh, uh, voted like the others, and, um, I don't know what I'd be doing.

9. 14:48 – 18:01

   The humanities advantage in investing: synthesis, judgment, and storytelling

   1. SPSpeaker14:48

      So in the era of the prized engineering degree in Silicon Valley, what value does that broad-based humanities education bring, given that about 50% of last year's incoming class, uh, came in with a humanities undergraduate degree? What value does that bring to the technology ecosystem here in Silicon Valley? What do you think?

   2. MMMichael Moritz15:09

      Well, I obviously have a prejudice and bias. And, um, knowing full well that I wish I understood more about the details of technology and engineering and all the rest of it, but if you're in the investing business in Silicon Valley, you cover such a wide waterfront of investing, that it's very difficult. You can't be... No matter how numerate and technical you are, you cannot be an expert in everything. So the ability f- to be able to... And this is much like being a journalist. To start on an endeavor where you know nothing, where you gather a lot of materials and facts, where you have to distill all of those facts and then form a cogent opinion and make a decision, it's not unlike writing a story, writing a history essay, or making an investment, or helping to determine an in- investment. What comes after that, after making the investment, all the sorts of things that these days go towards helping a little company and that might be composed of three people becoming something significant, that's very different set of skills, which y- I think just experience brings along. It doesn't matter whether or not you have a technical degree or anything. But, uh... And then the ability to be a storyteller and a clear communicator. I think those are really very, very helpful pursuits. But again, as I said, I have a bias and prejudice, and I was looking at the numbers. You know, at, at Stanford, for example, you had 64... 600... If I've got the numbers right, which they're roughly right, you had 647 undergrads in 1965 who were history majors. In 19... I- in 2014, which was the last set of data that I saw, you had 84. So they're a threatened species around here.

   3. SPSpeaker17:18

      [laughs]

   4. SPSpeaker17:18

      [laughs]

   5. SPSpeaker17:21

      Well, I think you put those skills to good use at Sequoia, given that it's consistently listed as one of the top venture capital firms. And I have to get this statistic right, because it kind of blew my mind when, when I first saw it. So s- since 1972, Sequoia has backed companies that now have an aggregate public market value of over $3.3 trillion. Uh, to put that in relative size, that's larger than the current GDP of the UK. Um-

   6. SPSpeaker17:48

      [laughs]

   7. SPSpeaker17:49

      What are the most... [laughs] Nice work.

   8. SPSpeaker17:52

      [laughs]

   9. SPSpeaker17:55

      [laughs] So-

   10. MMMichael Moritz17:57

       Put down.

   11. SPSpeaker17:58

       [laughs]

   12. SPSpeaker18:00

       [laughs]

10. 18:01 – 21:29

    Building enduring organizations: long time horizons and steady compasses

    1. SPSpeaker18:01

       So what do you think are the most important leadership traits needed to build enduring organizations such as Sequoia?

    2. MMMichael Moritz18:09

       Well, that's nice of you to say. Uh- Obviously, that's a, a question that's at the heart of our, um, heart of our pursuit at Sequoia, and also at the heart of the pursuit of the very distinctive companies that we would like to be an investor with. And being able to think and work in 20-year increments is such an advantage. Um, and I know that sounds a little weird and a little peculiar, but... And obviously, you can talk in a, a grand fashion about a 20-year plan, um, and it all sounds very good, but then you also have to work on what this afternoon brings. But having a sense of eventually where your compass is heading and where it's set and the trajectory you want to go on, and then breaking it down into all sorts of little steps, knowing that every step along the journey is gonna require different people, different skills, different relationships, different, uh, virtues, um, that you're constantly gonna have to change along, along the course in reacting to changing circumstances, changing market conditions, and all the rest of it, but never losing sight of eventually where you want to go. I think that's the biggest thing that, um, that has helped with us and helped with some of these companies that, uh, we've had the good fortune to be involved with. Now, obviously, not everything works out like that. A lot of companies start and, uh, maybe they flourish for a certain period of time, and then they're sold or... But the ones that we're looking for, I mean, it's now... Where are we? Uh, 2019. It's 20 years since we invested in Google, right? I still own the majority of my Google shares. And when, when somebody asks me today, "Why are you interested in in... Why is Sequoia interested in investing in our company?" Uh, uh, I, I'll always say to them, i- if I think it happens to be true in their particular regard, because some companies don't fit into that, it's because if we're all fortunate, if the sun shines on us, we can be shareholders in your company 20 years from now. That's what... We... Today, Airbnb. I think we invested in Airbnb $600,000 in 2008, I think. It may be 2009. It's 10 years. Happens like that, and the company's still private. Stripe, which is a payment services company, we invested in when it was three or four people. That was 2010. Again, nine years, nine years later. These are very, very long journeys that we're on, and it takes time and patience and spectacular people and a massive market opportunity, um, to build the real companies that matter and have an influence and, um, great impact on, uh, on society.

11. 21:29 – 24:52

    Talent development and organic team building: lessons from Sir Alex and Sequoia

    1. SPSpeaker21:29

       And you and Sir Alex talk about the importance of identifying high-potential talent in building these types of organizations. So, the example he used is a footballer some of you may know by the name of David Beckham, who was pretty good.

    2. SPSpeaker21:42

       [laughs] .

    3. SPSpeaker21:44

       Um, what characteristics are you looking for when trying to identify this high-potential talent, whether it be a founder or somebody you hire at Sequoia?

    4. MMMichael Moritz21:56

       I mean, you know, whether it's, whether it's... And part of the reason I, or the, the reason that I, I approached Alex to write the book about Manchester United was that, uh, for whatever perverse reason, people have been asking me to write a book about Silicon Valley or Sequoia, and I had no interest in doing that, but I was interested in writing about, um, enduring organizations. And I picked United because it was a long way away from Silicon Valley, but because I knew that he shared the approach that we cherished as well, one of which, well, Patrick, was the one that you just fingered, which was identifying people when they are young and then helping them develop. And why? Part of it is because you're not taking a lot of risk. Beckham, I think, you know, they, they i- they knew about Beckham when Beckham was eight years old at Manchester United. Now, we're not going around Stanford looking for eight-year-olds, but, um-

    5. SPSpeaker22:58

       [laughs]

    6. MMMichael Moritz23:00

       [laughs] We do like hi- hiring, at Sequoia, people who are young, because it's a business that even though it looks simple, and today I understand everybody's an investor from someone who writes $5,000 checks to somebody who writes a much bigger kind of check, but to do it well in the fashion that we like to do it takes time and patience and persistence and, uh, a willingness to learn. And assuming people like that flourish, you have incredible loyalty, and they'll stay with you forever. And, um, so that was true for a lot of the players who played for Sir Alex. It's... And I think being able to grow organically like that, it's such an enormous competitive advantage, where you have a stable team of people, which you're always amending, you're always changing. Someone is perhaps no longer playing as well as they used to play, so you figure out a way to deal with that. But then you're always replenishing the bench, but you're doing it in an imperceptible fashion to people on the outside so that all they see is, you know, in the soccer metaphor, the winning team on the field, without realizing that, actually, you know- There are two players on there today who weren't on that team 24 months ago.

    7. SPSpeaker24:25

       Mm.

    8. MMMichael Moritz24:25

       Um, but that's worked spectacularly for us. We've got these great... You know, Roelof Botha, who's, uh, uh, um, a graduate of GSB, and he became... He went to PayPal, and after PayPal he joined Sequoia, and that was probably now 8, 17, 18 years ago. And, you know, he's just spectacular. Just- he's just one example. We've got a whole bunch of other people like that, so it's great.

12. 24:52 – 27:53

    Defining founder obsession: Instacart and Bill Gates anecdotes

    1. SPSpeaker24:52

       One of the characteristics you mentioned that I was, I was really intrigued by is this idea of obsession. So the best founders, the best athletes tend to be obsessed with whatever it is, the thing that they're working on. I was curious, w- what do you think obsession means to you, and how does it, how does it feel? What... Like, how do you know it when you see it?

    2. MMMichael Moritz25:16

       There's a gentleman called Apoorva Mehta, who's the founder and CEO of Instacart, the online grocery company. And we're, we've been with Apoorva on his journey from... considerable period of time now. And before we invested, I asked him, um, how he had happened on grocery delivery as a business that he wanted to be in, and he said he'd played around with and toyed with a variety of other businesses that he wanted to start, and he'd got down the road on, I, I forget, two, three, four of those. But he said the only one... Or he real- realized Instacart was the one for him when it was the last... the idea of the business was the last thing that he thought about when he went to sleep and the first thing that he thought about when he woke up in the morning. And to me, [laughs] that was as good a definition of obsession as, uh, as any I've, I've heard. But it's that sort of, uh, full-on experience that, um, that, um, you can never s- stop thinking about and you, and, and you don't switch off. I'll give you another example from yesteryear, which was... Again, this is back to the early 1980s, and I had been up for, in, uh, Seattle working on a story about Microsoft for Time. And again, this was when Microsoft was still private and it was still quite small. And Bill Gates gave me a ride to the airport in his car.

    3. SPSpeaker26:51

       [laughs]

    4. MMMichael Moritz26:52

       And, um, not many people can say that they were chauffeured by Bill Gates.

    5. SPSpeaker26:57

       [laughs]

    6. SPSpeaker26:58

       [laughs]

    7. MMMichael Moritz26:58

       [laughs] In fact, I may put that on my LinkedIn profile-

    8. SPSpeaker27:02

       [laughs]

    9. SPSpeaker27:03

       [laughs]

    10. MMMichael Moritz27:03

        ... above all, all other forms of education. Um-

    11. SPSpeaker27:07

        [laughs]

    12. MMMichael Moritz27:08

        ... and the, the radio was missing in the car, big gaping hole in the dashboard. And I said, "Bill, so what happened here? Did you get ripped off?" [laughs] And he said, "No, I had it taken out." "Why'd you have it taken out?" "Well, I drive from my home to the office, which is seven minutes and 32 seconds, and then I'll drive from the office to the airport, which is however long." And he said, "If I've got the radio, I'm afraid that I'll switch it on and I won't be thinking about Microsoft."

    13. SPSpeaker27:43

        [laughs]

    14. MMMichael Moritz27:45

        That's obsession.

    15. SPSpeaker27:46

        [laughs]

    16. SPSpeaker27:50

        I believe you. [laughs]

    17. SPSpeaker27:52

        [laughs]

13. 27:53 – 30:19

    Competitive capital markets: ‘too much money’ as a recurring refrain

    1. SPSpeaker27:53

       So the funding environment right now, as you s- alluded to, is becoming extremely competitive. There are a record number of firms-

    2. MMMichael Moritz28:01

       I didn't allude to it. You alluded to it.

    3. SPSpeaker28:04

       [laughs]

    4. SPSpeaker28:04

       [laughs]

    5. SPSpeaker28:05

       True. Um, there are a record number of new venture firms and capital in the market. SoftBank just raised a $100 billion vision fund. Sequoia just raised an $8 billion fund. Are there too many investment dollars chasing too few investable opportunities right now?

    6. MMMichael Moritz28:21

       So, um, that's the line I've heard since 1986, uh, with one or two exceptions. Maybe 1991, 1992, and then right after the dot-com blow-up, when capital was... everybody understood that capital was scarce. It's always been a competitive funding environment. There've always been... Look, how many, how many companies get financed, and then how many become worth it... you know, become tremendously important companies? So if you just do that winnowing and look at the, the funnel, there are very, very few great companies. So everybody is madly in pursuit of those companies. And, um, a- and therefore... And obviously, there are these tangible examples of the enormous value that's been created in the world of technology in the last 30 or 40 years. Um, and so money has poured into the sector. But for us, it's always been this sort of an... almost always been this sort of environment, where a really spectacular idea can get, uh, raise capital, where somebody who's starting a company usually has choices of capital. I mean, that's the world that I grew up in. It's the world that we've always operated in, and I suspect it'll be the world we always operate in. It's just part of life in our business.

    7. SPSpeaker29:49

       So no bubble. You're good.

    8. MMMichael Moritz29:52

       Well, there, there are always... Look, there are always things that we will have done, others will have done, that five, 10 years from now we'll say to ourselves, "How did we ever do something as silly as that?" Or, "Wasn't it inane or crazy?" Or, "We didn't anticipate this, that, or the other." Uh, so I'm sure we'll have egg on our face from time to time. Ag- again, it's just an occupational hazard.

14. 30:19 – 34:34

    Diversity in tech and venture: commitments, constraints, and pipeline realities

    1. SPSpeaker30:19

       So I wanna talk a little bit about how Silicon Valley has changed. Um, there's cont- there continues to be many discussions happening about how to ba- make both technology companies and venture capital more diverse, uh, potentially beyond history majors. Uh, what responsibility does the venture industry have to fostering di- ... diversity in the technology ecosystem

    2. MMMichael Moritz30:43

       I, uh, the responsibility of the Valley of, of firms like ours is to identify burgeoning talent. And the more the merrier. From irrespective of gender, irrespective of background, uh, irrespective of, uh, of color. Now, that's easy to say, and it's a bland statement, and you will then rightly say, "Well, what are you doing about it, and what are you doing about it actively?" So we're doing what we can, but there's only so much that we can do. Firms like ours are representative of social trends, and no... I sort of sensed that this question might come up, so I turn the question around because I dug up the data on diversity at Stanford in majors, and it's shocking. So let me give you some statistics. So because I think it's, it... This whole issue is one that all of us have something to do about. So, and I'll give you one little example, say, from the math department in the undergraduate program here, and this is germane. I have a friend of mine whose daughter is in the math department at the moment, and is thinking about leaving the math department and switching to another major because she is surrounded by men. And so in 1983, if you were an undergraduate at Stanford, there was only 22% of the students who had elected math as their major were women. Guess what that number was in 2014, which is the last year when data was available. 22% in 1983, 16% in 2014. If you're a computer science graduate at Stanford, the percentage of women in the class in 1983 was 21%. In 2014, 20%. And the only point I'm making is, we'll hire as quickly and as merrily as we possibly can. We have seven female investment partners today. We've got, I think, close to half a dozen female CFO, uh, CEOs, um, that we've, that we've backed. But we're a reflection of society, and we can only change as fast as the rest of society will change. But we're more than happy to do our part. We funded all these different initiatives to help, um, help, uh, women in particular, um, in technology. We have, uh, um, one of our partners, Jess Lee, is working with something called Female Founders. But it's imperative for the high schools and for the universities of America to change before we'll see the real acceleration in technology, which I've gotta say is a lot better today, um, than it was 10 or 15 years ago. And I think, you know, if you look at the computer science numbers, those are the best numbers that I could find, um, at, at, at Stanford. But even so, they're not overwhelming. In 1983, the computer science proportion... the computer science class, uh, here, uh, undergrad, was 18%. It progressed, but in 2014, it was still only 28%. So there's tons of work for all of us to do.

    3. SPSpeaker34:31

       Mm.

    4. MMMichael Moritz34:31

       That's my only point.

15. 34:34 – 36:39

    Where to build: Silicon Valley vs. China, and the globalization of venture

    1. SPSpeaker34:34

       So I wanna take our discussion beyond the Valley, because investing outside of Silicon Valley has become a very popular topic, uh, as what... for a lot of people, including Sequoia. Do you think this is still the best place in the world to start a company?

    2. MMMichael Moritz34:48

       Um, it's, it's here and it's in, um, China. And there are trials and tribulations in- involved with, with both places. Um, and obviously, everybody knows about how expensive it is and the cost of living and gross receipts tax in, uh, San Francisco and all these other impediments that we wish weren't here. But my goodness gracious me, uh, much as people here will complain and moan about different aspects of Silicon Valley, you go to places elsewhere around the world, they all wish they were Silicon Valley. So it's a spectacular, fantastic place, um, in which to, in which to start a company. And then, um, um, I was saying to your illustrious dean, um, before, um, uh, I came, um, while we were chatting backstage, that I spent the last three weeks traveling in China and Southeast Asia. I mean, those are vibrant places. Uh, one of the very big changes, you know, China, obviously everybody's read about, but Southeast Asia is really, uh, pulsing with entrepreneurial activity. And that's a big change in the last five, five, six years. Everybody knows about India and talked about India, but Southeast Asia is, uh, surprisingly vibrant. So there are lots of... You know, the big change from when I started in the, in the venture business a long time ago now, uh, was that Silicon Valley, largely Silicon Valley, to some extent Boston, we had 100% market share, give or take, on the most important technology companies of tomorrow. That's completely changed. So that so much of the investment now occurs outside of the United States for a whole variety of reasons.

16. 36:39 – 39:58

    Finding the unexpected: why the best investments don’t fit neat categories

    1. SPSpeaker36:39

       So I wanna get a little bit of advice before we turn it over to the audience. So I think we're all trying to determine how to focus our time, energy, and resources upon graduation. If you were to put yourself in our shoes today, what problems or industries would you be focusing on? And maybe another way to ask that question is, where is Sequoia going to be investing so we can-

    2. MMMichael Moritz37:01

       [laughs]

    3. SPSpeaker37:02

       ... skate to where the puck's gonna be?

    4. MMMichael Moritz37:03

       [laughs]

    5. SPSpeaker37:05

       [laughs]

    6. MMMichael Moritz37:06

       Uh, well, that's, um, uh, uh, assuming that we know what we're doing.

    7. SPSpeaker37:09

       [laughs]

    8. MMMichael Moritz37:10

       Um, I've always found, you know, you go to any website, and every investor's website, um, despite the window dressing, they all look the same, and everybody's gonna invest in, you know, you'll, you'll... Whatever the buzz phrases of the era are, you will read them on all the sites. And, you know, today it may be, um, data science and machine learning and artificial intelligence, and w- whatever the attributes are. To me, the best investments are always the ones that don't fit in a convenient bucket. And, uh, and so you think about, I, I mentioned Airbnb, uh, a few minutes ago. You think about Airbnb, what bucket would you have put, uh, three couch surfers in in 2008? And in retrospect, it all looks so obvious. Oh, they're upsetting the hotel industry, and all the rest of it. But at the time that we met the company, it was three young founders who were sort of sleeping on air beds. Um, and it was sort of pigeonholed as this very niche service for young people. Who would ever have imagined? And I can point to any number of other investments that seem similar. So to me it's, you know, we- years and years ago, a Stanford, um, you know, this was an offshoot, yet another offshoot of the incredible fertile Stanford campus when we invested in Yahoo. The idea of investing in a company that gave its service away for free, this is 1995, was totally foreign, came out of left field. So it's those investments, the ones that aren't the obvious ones, that are the really interesting ones. We invested some years ago in, uh, in DJI, which is a drone company, uh, in China. Nobody had imagined it at the time that we invested it'd do, I, I think it did, I, I may be a bit off with the numbers, but $2 billion in sales last year from what seemed like a sort of little, you know, nice little consumer toy at the beginning of the investment, but which is now becoming a company of, uh, substance, particularly as it expands into industrial applications. So it's the... Or we're not an, uh, uh, unfortunately we weren't an early in- investor in Uber, but who would've... You know, luxury black car executive ride sharing, is that ever gonna become a business? You know, if you switch the clock back 10 years or whenever Uber got started. It's another one of those sorts of examples. So that's the thing to look out for. It's the, the unexpected.

17. 39:58 – 42:19

    Lightning round: priorities, heroes, luck, and the underrated skill

    1. SPSpeaker39:58

       I'm gonna move to the lightning round.

    2. MMMichael Moritz39:59

       [laughs]

    3. SPSpeaker40:00

       Um, one last chance, anyone? Okay. So I'll explain the format as we go. These are supposed to be fun. One word answers generally, but a couple lists. So prioritize the following in order of importance: product, team, market.

    4. MMMichael Moritz40:18

       Uh, equal weighting.

    5. SPSpeaker40:22

       [laughs]

    6. SPSpeaker40:27

       [laughs] Unbelievable.

    7. MMMichael Moritz40:31

       [laughs]

    8. SPSpeaker40:33

       It depends. Wow. Fill in the blank. The greatest entrepreneur of all time is...

    9. MMMichael Moritz40:46

       Whoever invented the wheel.

    10. SPSpeaker40:47

        [laughs]

    11. SPSpeaker40:51

        [laughs] Wow. Talk about yesteryear.

    12. SPSpeaker40:54

        [laughs]

    13. SPSpeaker40:56

        The greatest individual investor outside of the Sequoia partnership is...

    14. MMMichael Moritz41:01

        It's obvious. You know where he is in Omaha.

    15. SPSpeaker41:03

        [laughs]

    16. SPSpeaker41:07

        What is one company you passed on that you wish you had invested in?

    17. MMMichael Moritz41:10

        I wish it was only one.

    18. SPSpeaker41:11

        [laughs]

    19. SPSpeaker41:12

        [laughs]

    20. MMMichael Moritz41:13

        Uh, Uber. We became late stage investors, uh, in the company, but I wish we'd invested very early on.

    21. SPSpeaker41:22

        What percentage of success in VC is luck?

    22. MMMichael Moritz41:26

        Uh, 101%.

    23. SPSpeaker41:27

        [laughs]

    24. SPSpeaker41:28

        [laughs] The most underrated skill in a leader is...

    25. MMMichael Moritz41:35

        Listening.

    26. SPSpeaker41:38

        That's fair. I thought you would've said discipline.

    27. MMMichael Moritz41:41

        What?

    28. SPSpeaker41:41

        I thought you were gonna say discipline, for sure.

    29. MMMichael Moritz41:43

        Listening.

    30. SPSpeaker41:44

        Listening.

Episode duration: 42:19