The Next Generation of Software | Mamoon Hamid, Partner at Kleiner Perkins | Ep. 16

Mamoon Hamid 0:00 Kleiner had made history from the days of semiconductors, to then computers, to software, to the internet, those four big technology waves. If you look at the list of companies in each one of those major waves across decades, we've pretty much nailed every single m- dominant company in those waves. And so how could we make history again?

Jack Altman 0:23 [upbeat music] All right, Mamoon, I'm super excited to have this conversation with you. Thanks for making time for it.

Mamoon Hamid 0:27 Thank you for having me, Jack. Really good to see you.

Jack Altman 0:29 Um, so I wanna start by talking about your kind of history over the last couple decades or, you know, twenty-five years in Silicon Valley. And if you could just sort of take us back to when you came to tech in Silicon Valley, and maybe sort of the experience you had through the different innovation cycles.

Mamoon Hamid 0:47 I was really fortunate to come to Silicon Valley, uh, as a first-time engineer, first job out of college in 1997, uh, working for a semiconductor company, of all things, that was a company called Xilinx, actually a Kleiner Perkins-backed company, that, uh, was, uh, the underpinnings of lots of, uh, switching and routing equipment that was the, the backbone of the internet.

Jack Altman 1:10 Mm.

Mamoon Hamid 1:10 And so I got to really see from that lens, uh, the rise and the fall of the internet and, uh, see my stock appreciate and then depreciate a lot. And so, uh, I, I look back at that sort of first few weeks in my cubicle at Xilinx in San Jose, uh, in 1997. I'm nineteen years old. I'm very, uh, influenced by all the things that were happening around me, and, um, I've got a Sun workstation, and I'm running the Netscape browser, uh, buying books on Amazon, uh, for my grad school classes at Stanford. And turns out just that a new search engine has just, just come out, uh, called Google. And, uh, so these are the kinds of influences that I had, uh, in those early, early years in Silicon Valley. And, uh, and turns out actually all those companies, uh, Xilinx, Netscape, Sun, Google, and Amazon, were all companies backed by Kleiner Perkins at the-

Jack Altman 2:07 Mm

Mamoon Hamid 2:07 ... Series A. So, uh, which also got me thinking about, "Who are these venture capitalists? That seems pretty interesting as a job." Nineteen ninety-seven, 'ninety-eight, 'ninety-nine were, like, these boom years. Uh, it felt a lot like probably today, uh, but a lot more parties maybe-

Jack Altman 2:22 Mm-hmm

Mamoon Hamid 2:22 ... at the time.

Jack Altman 2:23 Mm-hmm.

Mamoon Hamid 2:23 And people forget that that was a time of, like, felt like a time of excess, actually.

Jack Altman 2:27 Was it way different feeling than now, like, on that front?

Mamoon Hamid 2:29 Uh, it, it, it slightly... Because I think we still have mostly builders today.

Jack Altman 2:33 Mm-hmm.

Mamoon Hamid 2:34 And, uh, by 1998, '99, non-builders had arrived to help monetize the internet, and a lot of interesting business models were sitting on top of, you know, the, the internet hype bubble. And so, uh, I feel like we're, we're still, like, a few years removed from that today here. Today's still builders.

Jack Altman 2:53 Did it all feel, like, smaller then, in a sense? Like, I mean, the whole industry, I guess, was smaller. So, like, did it feel like, uh, more of, like, an insider club, or did it feel like everyone's here, and this is, like, a huge deal, and the whole world knows?

Mamoon Hamid 3:04 I think it felt like everyone here, actually. It felt like all around, everywhere you went, uh, you know, just like the museums had parties at night, and, you know, like, the folks were hosting, like, dot-com parties, and they were a real thing. And then, and, you know, folks were up and down from San Francisco down to San Jose. It was, it, it, it was a palpable feeling of progress, momentum, excess even, uh, and it was, you know, for someone... I, I'd gone to college in the Midwest at Purdue, and so to come from Indiana to Silicon Valley in '97 and be sort of on the peripheral, s- periphery of that-

Jack Altman 3:39 Mm-hmm

Mamoon Hamid 3:39 ... felt, uh, you know, very different, for one. But it, it did feel like a palpable energy of exuberance and excitement.

Jack Altman 3:48 To me, I would think that it was closer to the AI moment than the ZIRP moment because there was a real thing happening. So I'm, but, but I'm curious if that's how it felt to you and to people who were here during it. Like, was it clear that it was overinflated, but there was something very substantial, or when the bubble popped, was it like, "Oh, we were all crazy?"

Mamoon Hamid 4:08 Yeah, I think it started to feel pretty crazy, and I think all of us at the time... You know, I was an engineer with a group of twenty other engineers, part of my cohort that got recruited from college. And so, you know, things that we were doing, uh, we were obviously on the internet, but we were also, like, day trading stocks. Like, uh, we were all had Datek accounts, E-Trade accounts, uh, and Schwab accounts, uh, because some of the stuff was so silly that was going on in the markets. A company would go public, it would have a 10X i- in that day, and then-

Jack Altman 4:39 That's crazy

Mamoon Hamid 4:40 ... you know, you, you, you sell the next day. And, I mean, I learned a lot of hard lessons in, in trading public equities in that, in those few years as a young person. But it was-- it felt silly. I mean, to, like, you could not equate what was you're buying and explain what it actually did and what kind of value it provided to people-

Jack Altman 4:57 Mm-hmm

Mamoon Hamid 4:58 ... and humanity-

Jack Altman 4:58 Mm-hmm

Mamoon Hamid 4:58 ... and, uh, to customers. And so, I mean, these were companies with no revenue and, uh, tens of billions of market cap. Uh, and so it, it, it, you could not connect reality, uh, to the prices of, for these stocks.

Jack Altman 5:13 Since you've lived through many of these cycles, and we'll go to the, we'll go through sort of the journey of them, but since you've lived through many of them, do you feel able to point to when we're in one now, or do you feel no more able to point to one than somebody who's not been through a bubble?

Mamoon Hamid 5:28 Part of the, the calculus of my brain is that y- you, um, keep an open mind and some naiveté and not be the, the old guy who looks at, "Well, I saw that happen back then. It was gonna fail." And because if you have that mentality, you're gonna miss everything.

Jack Altman 5:43 You would have missed the twenty-teens, I guess.

Mamoon Hamid 5:45 Absolutely.

Jack Altman 5:45 I mean, a lot of people did 'cause it just kept going.

Mamoon Hamid 5:48 Yeah, and you, you just have this sort of, you know, got a half glass full here. So look at a half glass full and, uh, imagine the possibilities, the optimism of the technology shifts that are occurring in front of us, and rather than, like, looking at it in a way of, like, "Well, Pets.com didn't work, so, you know, the next, uh, Ch- Chewy is not going to work."

Jack Altman 6:07 Mm-hmm.

Mamoon Hamid 6:07 Well, Chewy really did work. And so you have to keep an open mind and think about the why now and is the time right for this to happen now? And I think that is the lesson, is the takeaway is that-... is the timing of it. A lot of the stuff that happened in the dot-com boom, the timing was just off. There weren't enough eyeballs or enough people ready to adopt-

Jack Altman 6:27 Right.

Mamoon Hamid 6:27 -these products and technologies.

Jack Altman 6:28 Yeah.

Mamoon Hamid 6:29 And it took an, a good five to seven years later for them to become a bit more mainstream behaviors. Uh, so timing matters so much in what we do, and I think that's probably the takeaway, is how do you have-- take all the inputs of, like, how technology's making an impact, the products we can build with that, with that technology, and how many people can those products reach? And then I think, is it the time now?

Jack Altman 6:49 Right.

Mamoon Hamid 6:49 Or is it three, four, five years from now?

Jack Altman 6:51 Yeah, or some even fifteen years later, right? Like, what-- there were some, like, grocery startups that tried to do it in dot-com, and that took fifteen years later to get going again.

Mamoon Hamid 6:57 Yes. Uh, you know, Webvan is a-

Jack Altman 7:00 Yeah.

Mamoon Hamid 7:00 You know-

Jack Altman 7:00 And then Instacart.

Mamoon Hamid 7:01 -Instacart.

Jack Altman 7:01 Yeah.

Mamoon Hamid 7:01 It took a good fifteen years-

Jack Altman 7:02 Yeah

Mamoon Hamid 7:02 -for that to happen.

Jack Altman 7:02 Yeah.

Mamoon Hamid 7:03 And it turns out, I think the same investor [chuckles] invested in both.

Jack Altman 7:05 Yeah.

Mamoon Hamid 7:05 Because you realize, like, ke-kept an open mind.

Jack Altman 7:07 Yeah.

Mamoon Hamid 7:07 And Mike Moritz kept an open mind.

Jack Altman 7:08 Which is very impressive when you think about it.

Mamoon Hamid 7:10 That is very impressive.

Jack Altman 7:10 Not getting burned-

Mamoon Hamid 7:11 Yeah

Jack Altman 7:11 ... and

Jack Altman 7:12 deciding to sell it. So, so after dot-com burst... Actually, I'm curious, two thousand to, like, two thousand and five, like, kinda like before cloud-

Mamoon Hamid 7:19 Yeah

Jack Altman 7:19 ... like, what was happening then?

Mamoon Hamid 7:20 What was happening then is, uh, nobody could get a job. So, um, the reason why I stayed for six years at the company I stayed at, Xilinx, was because, uh, I was on a visa, and then eventually I did get a green card. But, but in nineteen ninety-nine, two thousand, if I wanted to go get a dot-com job, I-- pretty much the, the window was short, and you could not transfer your visa, and so you stayed at your job. And so I was fortunate to keep my job-

Jack Altman 7:42 Mm-hmm

Mamoon Hamid 7:42 ... but I also, uh, realized that things were kinda slow in the valley, and it felt like, uh, I was looking for the next thing.

Jack Altman 7:49 Mm-hmm.

Mamoon Hamid 7:49 And the next thing for me actually was a great opportunity for me to leave the valley for two years and go to business school. I left to go to business school and went to Harvard because I wanted to, one, is leave, go somewhere new, different, but then also come back when things are more exciting again. And it was actually, like, the perfect time to have left-

Jack Altman 8:06 Mm

Mamoon Hamid 8:06 ... uh, in two thousand and three, and come back in two thousand and five.

Jack Altman 8:08 Right, you didn't miss much.

Mamoon Hamid 8:10 Didn't really miss much. And actually, that was right, uh... Yeah, it's kinda sorta interesting. Uh, I was at grad school at Stanford when Google got started, and I was a student at Harvard when Facebook got started. So the timing of it, seeing that, was sort of the beginning of Web 2.0. Web applications that were super cool, consumer-friendly, user-friendly, you know, and Facebook was kind of an innovator there on the LAMP stack, and a lot came of web, post-Web 2.0, starting two thousand and four or five onwards. And so I land back here in two thousand and five, um, and in a job now in venture capital, uh, actually trying to do semiconductor investments-

Jack Altman 8:47 Hmm

Mamoon Hamid 8:47 ... but realizing, like, as a young person, semis is probably not where it's at.

Jack Altman 8:51 Yeah.

Mamoon Hamid 8:51 And, uh, the place to probably think about investing is in, uh, web-based software-

Jack Altman 8:57 Hmm

Mamoon Hamid 8:57 ... or cloud software. And that was yet not a term. Salesforce did exist, but there were not a lot of cloud software businesses or, um, Web 2.0 consumer app businesses were just emerging. This is a time of, like, you're just getting, um, uh, you know, Flickr, and you've got Facebook, you've got MySpace, and so there's a palpable feeling, actually. If you were, you know, just a few blocks from here in SoMa, a good friend of mine, who was my classmate at HBS, was Jeremy Stoppelman, and he started Yelp in two thousand and four, dropping out, uh, from our class, actually, to start Yelp. And he actually told me, like: "Hey, you wanna come join me to do Yelp?" And I said, "Ah, you know, I'm gonna go back to second year of business school and then get a VC job." And, uh, maybe I should've done that, but, uh, but that was... Yelp was yet another one of those very early Web 2.0 companies. And so with that lens, I got to see all this, like, amazing, cool, UI-centric web software get built. A lot of consumer stuff was coming out at the time, and I, I took a liking towards more of the, uh, software for, for businesses, specifically around productivity. And, uh, if I look back at around just, like, you know, growing up in the desktop software world, you know, in the eighties and nineties, I, uh, I thought about just, you, you know, what were the applications that I used as a, as a kid growing up? You know, sure, playing games, coding, all that. But one thing I remember is you always went back to the file explorer.

Jack Altman 10:19 Mm-hmm.

Mamoon Hamid 10:19 You know, like, you always were clicking around files, finding the executable or, you know, finding a document. And so I thought, "Okay, well, how do you take desktop software and move it into the browser? And what would be the application that would first end up in the browser?" And, uh, the, the one that I sort of perseverated around and really obsessed around was the file explorer and file sharing specifically, which actually sort of led me to my first investment in, uh, Box-

Jack Altman 10:45 Mm-hmm

Mamoon Hamid 10:45 ... back in two thousand and seven. And so seeing those sort of cycles play out, where, you know, was it time now to build stuff for the browser? Yes.

Jack Altman 10:54 Mm-hmm. Mm-hmm.

Mamoon Hamid 10:54 And what was, what were the first applications that would do really well inside the browser? And then specifically, what would those applications look like for productivity, for workplace, um, type, type products? And so, um, which led, you know, to this first investment in Box.

Jack Altman 11:08 At least in that telling, there was a very, um, logical sort of, "Here's how the world's moving. Here's what should happen next. Therefore, I need to find something that's doing this."

Mamoon Hamid 11:17 Yeah.

Jack Altman 11:18 How much was it like that, versus was it meeting Aaron and being like, "This guy's awesome. I'll back whatever he wants to do"?

Mamoon Hamid 11:24 It was both, actually. You meet Aaron for the first time, and you, like, "I want to invest in him." I mean, it was one of those first meeting, instant, like-

Jack Altman 11:33 Yeah

Mamoon Hamid 11:33 ... I need to back this person. Uh, and it was-- he thought about the product problem. He's twenty-one, I believe, at the time. He thought about it as if he's been working on this problem for ten years, and he, and he really poked the holes himself before I could poke the holes myself, and-

Jack Altman 11:50 Yeah, I had him on the podcast. He's been on it for, now it's twenty years working on it, so he really is, I mean, a deep interest in it, obviously-

Mamoon Hamid 11:57 Twenty years!

Jack Altman 11:57 ... like a lifelong interest. Yeah. [chuckles]

Mamoon Hamid 11:58 It's a life-

Jack Altman 11:59 Yeah.

Mamoon Hamid 11:59 File sharing is a lifelong interest, and now obviously with AI, they've got... And, uh, it's been a boon for them, and, uh, I think they're over a billion in revenue-

Jack Altman 12:07 Yeah

Mamoon Hamid 12:07 ... very profitable.

Jack Altman 12:07 It's amazing.

Mamoon Hamid 12:08 All-time high market cap.

Jack Altman 12:09 Those years, you know, two thousand and six, seven, eight, nine, was it consensus in venture, people who were thinking all the time about this stuff, that cloud was what was going on? And maybe could you compare it to today's level of consensus on AI?

Mamoon Hamid 12:25 Yeah. It, it was not the consensus. I would say, uh, if you ask Aaron about his, the round that I invested in, uh, he would-... tell you, like, there were no other investors who wanted to invest in the company at the time.

Jack Altman 12:36 And people weren't believing in cloud, if I remember at the time?

Mamoon Hamid 12:39 It was just-- Yeah, maybe like, can a young founder build a, an enterprise software business?

Jack Altman 12:44 Mm-hmm.

Mamoon Hamid 12:45 Like, you have to go sell to Fortune five hundred companies. So that was one thing, one ding. I, I actually remember when, um, my good friend Jeremy Stoppelman was raising capital. It was like, you know, we, he would-- we'd be told, like, "You're wearing a T-shirt and jeans to partner meetings, pitches." Like, "How serious can you be about building a company?"

Jack Altman 13:02 Mm-hmm.

Mamoon Hamid 13:03 It's a bit like the whole Zuck thing when he showed up in-

Jack Altman 13:05 The hoodie.

Mamoon Hamid 13:05 -a little bit extreme, like, pajamas or whatever it was, and flip-flops or the Adidas sandals. Uh, but that was new to the venture ecosystem. You have to remember, like, in nineteen ninety-nine, two thousand, uh, a lot of business folk, folks entered the VC world, and, um, you know, they were, like, buttoned-up, you know, um, slacks and shirt and some even a jacket, and, um, investing in, like, you know, networking and semiconductors and generally with l-- not a lot of technical backgrounds. The, the point was more that you're investing in, like, all this hardware stuff that is you-- being u- u-used to build out the Internet, and all of a sudden, you're, you're thinking about investing in the SaaS software. Like, it's a... You know, you're going from chips and networking systems and selling hardware-

Jack Altman 13:50 Mm-hmm

Mamoon Hamid 13:50 ... like hardware systems. That was where, you know, some of the biggest exits came, uh, including for Kleiner Perkins at the time, you know, like Juniper, Cerent. These were like-- Cisco Systems was the highest market cap company, uh, i- in two thousand at almost half a trillion dollars, and that was the world that we lived in, and that was the consensus was hardware networking. And play it forward a few years, it hadn't yet moved to software and cloud yet.

Jack Altman 14:15 Mm-hmm.

Mamoon Hamid 14:15 And Salesforce was still, like, a, you know, I think sub-billion-dollar, you know, startup. I don't think it actually eclipsed that billion-dollar number until it went public, I think in two thousand and four. So it was certainly not consensus at the time that people would start adopting cloud software for business work in two thousand and seven, eight, nine.

Jack Altman 14:35 Yeah. Did it flip at some point? Like, was there a moment that you remember where everyone was like, "Okay-"

Mamoon Hamid 14:41 SaaS?

Jack Altman 14:41 Yeah.

Mamoon Hamid 14:42 Yeah. In the early two thousand and tens-

Jack Altman 14:44 Mm-hmm

Mamoon Hamid 14:44 ... it took a while, actually, for it to flip, where everyone became all about SaaS. And, uh, you know, uh, Jason Lemkin from-- who started a company called EchoSign, I'm sure has a lot, ton of stories as well, that he couldn't get his company funded, and he sold it to Adobe for a decent amount, but not, like, an incredible outcome. Uh, but that was sort of the era of, like, the obvious applications that should reside in the cloud for business, for work, were not getting funded and, uh, ended up with small outcomes. And it was not until, I'd say, the two thousand and tens or so that, that really, like, the, you know, it got a little hypey.

Jack Altman 15:19 So then, I guess somewhere in there on top, there was mobile, and was that-- Did you experience that as, like, a completely separate wave? Was it intertwined? 'Cause I guess that was, you know-

Mamoon Hamid 15:30 Yeah

Jack Altman 15:30 ... happening in these same years to an extent.

Mamoon Hamid 15:32 Yeah. And, and so, so cloud happens, let's say two thousand and eight, nine, ten is when, you know, AWS comes out in six, two thousand and six, two thousand and seven, really, and, uh, you can now finally start to build software in the cloud, tru- truly in the cloud. I mean, Box, for the longest time, was still racking and stacking storage systems and, and even through, like, the late two thousand, like, two thousand and ten even. So you didn't have, um, you know, uh, all the Amazon storage products that they offer today. So it took

Mamoon Hamid 16:03 a while to get there. Mobile comes along, I would say... I don't know if you recall this, but in two thousand and eleven, uh-

Jack Altman 16:09 That's when I graduated.

Mamoon Hamid 16:10 College.

Jack Altman 16:10 Yeah.

Mamoon Hamid 16:10 And if you remember using Facebook, it was not yet a mobile app.

Jack Altman 16:14 Yeah.

Mamoon Hamid 16:14 It was sort of a, an HTML5 wrapper. So that, you have to remember, like, even in two thousand and eleven, twelve, we were still doing, like, these wrappers, and, and not, not a lot of folks had just yet built, uh, native iOS apps. There was still this debate around whether, uh, wrappers or native apps, and, uh, and I think, you know, uh, the likes of Uber being, like, a killer app, and I think a lot of gaming companies-

Jack Altman 16:40 Yeah

Mamoon Hamid 16:40 ... like Zynga Games and a lot of the social gaming companies really made native apps that really got people... If you look at the leaderboards of the charts of the Apple, the App Store, um, the, the early days were a lot of games.

Jack Altman 16:53 Mm-hmm.

Mamoon Hamid 16:53 Mafia Wars and, um, and I think-

Jack Altman 16:56 Totally

Mamoon Hamid 16:56 ... gaming really drove, uh... And I think generally, like, some of the fun stuff really drive the de, uh, the development of technology.

Jack Altman 17:03 Yeah.

Mamoon Hamid 17:03 Like, it pushes things forward. Even in the Internet 1.0 days, uh, a lot of the fun stuff pushed things forward, even, like, multiplayer games, uh, drove, like, how, um, like, graphics and use of bandwidth, et cetera. Uh, and I think the same thing happened with mobile as well.

Jack Altman 17:19 Mm-hmm. Basically, then, through the teens, we had cloud and mobile were dominating.

Mamoon Hamid 17:24 Yeah.

Jack Altman 17:25 And sort of, you know, my experience in tech up until just recently, that was kinda my whole existence, was just, like, cloud and mobile as just, like, the thing. And obviously, people were like, "This is the top. Vice evaluations are too expensive. It can't keep going," and it kinda just did, and it just, like, ran for, like, a decade there or more, I guess.

Mamoon Hamid 17:41 Yeah.

Jack Altman 17:41 Then we had, obviously, the pullback when everybody was sad. There hadn't been the thing. Marc Andreessen recently just described that as, like, there was, like, the wandering or searching phase, and then-

Mamoon Hamid 17:50 Totally

Jack Altman 17:50 ... now we're climbing

Jack Altman 17:51 the hill. And so that brings us to AI, and, um, we talked a little bit before. You mentioned that, like, you know, out of your last fifteen investments, they've basically all been what you could describe as, like, an AI investment. Now, putting AI in context of these, you know, these other moments in time through your career, can you talk about sort of your perspective on where we are, what's the same, what's different?

Mamoon Hamid 18:10 AI is, to us, the, the super cycle of all super cycles. Uh, they're-- Now that we're, like, two and a half years in, and when I say two and a half years, I, I liken the day zero to be the first time I saw ChatGPT, uh, when Sam was kind enough to give a bunch of us a demo of it in October of twenty twenty-two. That was, like, the light bulb moment is, "Oh, my God, this stuff is real."... and there's gonna be really exciting stuff built like it, with it, with these models. We've been on that sort of quest to invest in what we think will be those generational companies. And maybe just to take a step back, though, if you look back at the, the start of our firm, Kleiner Perkins, in 1972, the overall GDP of the world was, like, three trillion dollars. And in the last couple of years, we've crossed a hundred trillion-

Jack Altman 19:07 Mm-hmm

Mamoon Hamid 19:07 -of GDP of, of the world. And, um, historically, sort of it's, like, continued to rise as a percent-- technology has risen as a percent of GDP to about fifteen percent of that GDP, so about fifteen trillion dollars. If we just grew at the rate that historically that tech has grown as a percent of GB-- GDP, uh, it will grow from fifteen trillion to about, like, thirty trillion over the next decade. Uh, and that's, you know, if the GDP grows from hundred to hundred and fifty, uh, trillion. And, uh, so we're looking at these really big numbers. So there's like a, a doubling, like you're creating as much value in tech over the next ten years as you did-

Jack Altman 19:48 Total

Mamoon Hamid 19:48 ... in all, all of tech combined.

Jack Altman 19:49 Yeah.

Mamoon Hamid 19:50 But what if tech grows faster because of the tailwinds of A- AI? And, uh, maybe to frame that is, if you look at that hundred trillion of GDP today, sixty percent of it is, is labor, human labor. And AI is not just a, a new way of working, new productivity technology. It's not a, uh, a new way of consumer apps. It is a-- there's a strong element of labor-

Jack Altman 20:18 Doing the job

Mamoon Hamid 20:19 ... doing the actual work autonomously, and that is a sixty trillion dollar opportunity. You can view it as an opportunity or view it as like, "Oh my God, what happens to those jobs?" I worry less about the jobs because humans are evolutionary, and they figure out what to do with these tools. We did it fifty years ago, forty years ago, thirty years ago. We did it in the Industrial Revolution. We did it in the Computer Revolution, the Software Revolution. We'll do it in the A- AI revolution. We'll figure it out. But there is up for grabs all these jobs to be done-

Jack Altman 20:52 Mm

Mamoon Hamid 20:52 ... which are literally trillions of dollars. And, you know, I, I love looking at numbers and historical charts, and i- if you look at the, the market cap, like tech, as a percent of the overall market cap of the whole world, like, you know, it's like also roughly actually close to a hundred trillion-

Jack Altman 21:10 Mm

Mamoon Hamid 21:10 ... is the overall market cap of all the stock markets. And, uh, tech is, uh, today about thirty, thirty-five percent of it, and it's rising pretty actually fast because I think it's already starting to-- the a- effects of AI on how value gets allocated amongst enterprises is already shifting towards companies that are, you know, the NVIDIAs and the Metas and the Googles, and those are Amazons that are benefiting from the AI tailwinds. And so I think the inevitable future is that a lot more of this, these trillions of dollars is the opportunity for all of us in, in the venture world. I mean, we're talking about literally,

Mamoon Hamid 21:48 like, trillions.

Jack Altman 21:48 So I guess, I mean, the-- to state the obvious, your mindset right now is this is gonna be an unbelievable period to invest. I'm curious how you think about structuring, you know, the way you're gonna go about it. Like, if you have to look over the next year, two years, five years, like, how are you logically approaching the situation to invest?

Mamoon Hamid 22:09 Yeah, so we at, at the end of the day, we have to break down the problem and then find places and people to invest in at the early stages. That, that is our business. And so what, what we looked at is that ChatGPT moment happens. So, okay, so how do we address this market? There's-- you can go after the foundation models, you can go after sort of the, the middleware infrastructure, or there's the application layer. And, uh, a lot of us at KP are pretty application-centric, and we took a point of view around, let's go think about how we address the applications, the jobs to be done. That's sixty trillion dollars. How do we go after the jobs to be done? We took a pretty simple point of view, which is, w- uh, we sort of created like a, the job pyramid. At the top of the pyramid are highly skilled workers who are, um, highly paid, uh, but they're also fairly scarce in nature. So those are doctors, those are lawyers, those are engineers. And if you look at a, a chart of the top twenty jobs in the US by pay, those are doctors, lawyers, and engineers. And so we thought, "Okay, so how do we invest in copilots for these job types?"

Jack Altman 23:20 Why copilots?

Mamoon Hamid 23:21 Because at the time, two and a half years ago, they were still-- we're, we're talking about, like, uh, nascent in terms of what their capabilities were and ov- over time, become more autonomous. But copilots, because there are parts of these jobs that are very nuanced, and the human brain needs to process those parts of the job. But there's parts that AI scribing or like taking notes as a ph- as a physician when you're talking to the patient. Uh, you know, I, I saw my wife, who's a physician, take chicken scratch notes and bring them home at night and then transcribe them into her EMR, uh, when she was at Stanford, and so it's... You know, every doctor does it, and I was actually at a doctor visit this week-

Jack Altman 24:02 Mm

Mamoon Hamid 24:02 ... where a doctor was still doing it, and I, I told, uh, the doctor, like: "Have you considered using Ambience for your AI scribe?" And so the point is that you and I could be having this conversation, and this twenty-minute conversation gets fully transcribed into the EMR-

Jack Altman 24:16 Yeah

Mamoon Hamid 24:17 ... with a diagnosis, with the, the drugs potentially to descri- to prescribe, as well as all the coding that needs to be done for billing, for insurance, all happening, happening sort of in the background autonomously. Uh, but that's a job that, you know, a doctor doesn't really love doing.

Jack Altman 24:32 Yeah, I mean, in general, it seems like there's all these conversations happening throughout our days at work, whatever, and we're just losing most of it to the ether. And I could see one day thinking that's insane, that we had this conversation, and I couldn't recall it or do anything with it because I just forgot about it.

Mamoon Hamid 24:47 Yeah, and that's the magic of products like-... granola, right? Or, and so what we decided was, okay, so we invested in Ambience for, for, for doctors, for clinicians. We invested in Harvey for lawyers, uh, we invested in, uh, Windsurf for, for engineers, and, uh, sort of took that sort of layer-by-layer approach to the different job types. So that pyramid of, like, highly skilled, highly, highly paid, sort of making two hundred K a year or so or, or more, and let's go invest in some co-pilots.

Jack Altman 25:16 To connect it to Box way back in the day, the way you just described those, again, felt like you had a plan and you had a view on the world, and something should exist, and then you went and found that thing. Is that an accurate sort of way that you go about doing your work and finding these companies? Or is it just-

Mamoon Hamid 25:33 Yeah

Jack Altman 25:33 ... they're coming to you, and they make sense?

Mamoon Hamid 25:35 I, I think it's, it's a bit of both. They both, they come-- So the technologists who understand technology and how to use it to build great products, uh, and when the time is right for those products to exist because the technology is refined enough, mature enough to actually use it for production environments, that's how I think. How do you match technology that's readily available today and production ready-

Jack Altman 25:57 Mm-hmm

Mamoon Hamid 25:57 ... to the markets that could exist? In parallel, founders are thinking the same thing. Great founders are, and they're timing the market just like we're trying to time the market. And I think you sort of match each other up. They're starting companies, and we're looking for them out there. And, uh, and I think in all those cases, those are founders came to the same conclusion that we did.

Jack Altman 26:16 Yep.

Mamoon Hamid 26:17 And they started the companies when they did, and we backed them-

Jack Altman 26:19 Mm-hmm

Mamoon Hamid 26:19 ... because we thought the time was right.

Jack Altman 26:21 I guess the future-looking version of the question I asked would al- be, um, do you have a set of ideas right now that you are really eager to invest in? If you found the right entrepreneur, you'd be, like, very leaned in to invest because it's an idea that makes sense to you next.

Mamoon Hamid 26:36 Taking that pyramid structure again, it's that invisible pyramid I'm drawing here-

Jack Altman 26:39 [chuckles]

Mamoon Hamid 26:39 ... is okay, so you go one layer below. Okay, what are the jobs that are, like, slightly less paid but still skilled? Okay, th- those are nurses, they're, uh, salespeople, they're financial analysts, um, they're jobs of that ilk, still very qualified, college-educated. And we found that, okay, well, now some of those parts of those jobs, you can actually just do them completely autonomously. For example, for nurses, uh, we have a company called Hippocratic, which is an autonomous agent that does work that a nurse would do, like make a bunch of phone calls. Like, they're making thousands of phone calls today to patients to talk about either, like, a pre-op conversation, a wellness check, uh, do, like, a post-op check-in. And, and by the way, when you-- you know, it turns out that patients like to respond to phone calls in the morning or in the evening, like, eight AM to nine AM or before work, or five PM to six PM. Well, guess what? Like, if you tell a nurse, "You can only call in those, those hours," that's pretty hard.

Jack Altman 27:40 Mm-hmm.

Mamoon Hamid 27:40 But if you can-

Jack Altman 27:41 An agent can do it.

Mamoon Hamid 27:42 You can agent, you can tell them, "Call-"

Jack Altman 27:45 Call.

Mamoon Hamid 27:45 "-only those hours."

Jack Altman 27:46 And ten thousand people simultaneously.

Mamoon Hamid 27:48 Do it. Exactly.

Jack Altman 27:48 Yeah.

Mamoon Hamid 27:49 That's the beauty of when you create abundance through AI, you can do some pretty s- amazing things. And, and by the way, those calls today are probably made, they go to voicemail, and then you don't do a follow-up because you just don't have enough humans to make those follow-up phone calls.

Jack Altman 28:00 AI will never give up.

Mamoon Hamid 28:02 AI will never give up.

Jack Altman 28:03 Yeah.

Mamoon Hamid 28:03 Right? And then that hopefully, or in the fullness of time, creates the right outcomes that these protocols are suggesting. Why should these calls be made? Is because there's some protocols that suggest if you make the call, you increase the, the-- decrease the likelihood of readmission by X amount. And so all this abundance in AI, uh, creates all these opportunities to just, you know, get to the asymptote of a better, better world. And so back to your question around like, you know, what are the things that... So this phase of, like, in the last year or so, like, a lot of autonomous agents that are doing parts of the work just completely on their own. And I think

Mamoon Hamid 28:39 the end state is if you go down, so what is the, the, the lowest paid work, um, and lowest skilled? It's physical labor.

Jack Altman 28:46 Mm-hmm.

Mamoon Hamid 28:47 And it's just the, the, the truth. It's like back-breaking work that people do and still do it, and that's probably the hardest place to attack today. And we're, I'm, we're thinking sort of m- much further out, which is, like, ro- robots.

Jack Altman 28:58 Yeah.

Mamoon Hamid 28:58 It's like humanoids. The, the beauty of our time was that, you know, uh, the transformers, LLMs, really were able to take all the corpus of the internet, take lots and lots of textual data, transcript data, and understand this corpus and do really well, well with, uh, factual, knowledge-based data. But when it comes to the physical world, there is so much more, and no one's fully, uh, you know, digests every single piece of video to understand or actions, human actions, uh, to, to s- solve and address robotics today.

Jack Altman 29:32 Right.

Mamoon Hamid 29:32 And I think that's a magnitudes bigger problem to address that, a c- couple of really cool companies are looking at doing, but the problem is bigger, bigger-

Jack Altman 29:42 Much bigger

Mamoon Hamid 29:42 ... and the cost to actually accomplish it in magnitudes bigger.

Jack Altman 29:46 Yes.

Mamoon Hamid 29:47 And, uh, I just think that's, like, further down the road for us.

Jack Altman 29:49 That one could be like investing in grocery in the dot-com era instead of in twenty fifteen.

Mamoon Hamid 29:54 Totally.

Jack Altman 29:54 And it's, like, an obvious outcome, but it's, you know, not there.

Mamoon Hamid 29:57 Totally.

Jack Altman 29:57 Like, even setting this room up this morning, like, a lot of people had to move a lot of things around to the right place-

Mamoon Hamid 30:03 Yeah

Jack Altman 30:03 ... and set up stuff. Doesn't seem physically impossible that a robot could do that one day. It just doesn't seem like we're there quickly.

Mamoon Hamid 30:09 Yeah, it, it goes back to the, the cost equation.

Jack Altman 30:11 Yeah.

Mamoon Hamid 30:11 You know, I think you could get a robot, but that robot probably cost you half a million dollars to do the work that was done here today.

Jack Altman 30:16 Yep.

Mamoon Hamid 30:17 And it would take the robot probably five times as long.

Jack Altman 30:20 Yep.

Mamoon Hamid 30:20 Okay? And so it's all about the cost benefit or cost, the cost equation, and I think we'll get there eventually. We always get there-

Jack Altman 30:27 Yeah

Mamoon Hamid 30:27 ... but it takes some time.

Jack Altman 30:28 Seems like that will be, to me at least, that seems like that will be, like, the biggest economic unlock and maybe, like, sort of, um, quality of life unlock imaginable to me. If you could really have humanoid robots doing all that, I mean, it seems like a fantastical idea, but this keeps coming up on the podcast. It's, like, the obvious eventual conclusion, and I don't see why it wouldn't happen and why it wouldn't be, like, the biggest thing that ever happened.

Mamoon Hamid 30:50 Yeah. I haven't thought of it that way, but just, uh, one is that I'm not sure it's the human form factor.... uh, that, the, I don't know if you need a humanoid-

Jack Altman 30:57 Yeah, you're right.

Mamoon Hamid 30:58 A robot.

Jack Altman 30:58 But just a robot.

Mamoon Hamid 30:59 Just a robot.

Jack Altman 30:59 Yeah.

Mamoon Hamid 31:00 Yeah, a robot, like on wheels, moving around, doing things that we would do. Uh, I think it's already-- it's-- we're closer when it comes to moving vehicles, bringing things from point A to point B. Uh, you know, like Amazon deliveries, food deliveries, all that delivery-type stuff, right? But, but things like, uh, in factories where there's very confined jobs to be done, uh, we have a company really, it's called Dexterity, which loads, unloads boxes off of FedEx trucks-

Jack Altman 31:26 Mm-hmm

Mamoon Hamid 31:26 ... or UPS trucks. You know, just like, um, which is again, like, you know, it does like-- if you watch the videos, it does a, a perfect job of, like, squeezing boxes into crevices that humans would never think about s- squeezing a box into.

Jack Altman 31:39 [chuckles]

Mamoon Hamid 31:40 And so if you break the job down into very specific things, like, I think you can already do it today, but I think the, y- you know, the very, um, dexterous robot that does a random set of things in your house-

Jack Altman 31:54 Super far.

Mamoon Hamid 31:54 Super far.

Jack Altman 31:55 Yeah, I agree. I agree. I'm just very interested in the idea of, like, how far can prompting go? I think about what type of business might you be able to prompt into existence in five years.

Mamoon Hamid 32:05 Yeah.

Jack Altman 32:05 Like, could you prompt a simple e-commerce business? Seems like you could probably do that. Could you prompt, like, a SaaS business into existence, et cetera? And you can, like, go down the levels of complexity of, like, what is promptable into existence. But on the robot side, if, like, one day, thirty years from now, you could prompt, "Build me a house," that'd be crazy.

Mamoon Hamid 32:23 Yeah.

Jack Altman 32:23 But it doesn't seem physically impossible at some point. I don't know.

Mamoon Hamid 32:26 It does not.

Jack Altman 32:27 So I guess you're thinking through this kind of pyramid, and that's informing the way that you go about your investments. I kinda

Jack Altman 32:35 wanna now shift over to you building the firm and sort of how you're now, you know, marrying the apparatus that you, you know, are leading to approach the situation. Where I wanted to start was the thing that, um, I think is very impressive, rare, and interesting is you came to Kleiner in 2017, and Kleiner has this unbelievable history back to the early '70s, super dominant, you know, like investing in unbelievable companies. Obviously, it was still, like, a meaningful thing, but it, like, went through, like, a trough relative to, like, the- those heights. It seems like it's pretty rare that new life gets breathed back into a really storied old venture firm, and I'm just curious to hear about what went into whatever you did to make that happen.

Mamoon Hamid 33:22 Mm-hmm. Yeah, no, it's, um, it's been the, you know, journey and honor of a lifetime to be at Kleiner Perkins since, uh, when I joined, uh, almost eight years ago. It, it is the firm that really got me thinking about venture capital in the first place when I was a young engineer at Xilinx. Uh, and it... At the time, there were, you know, the equivalent of TechCrunch or your podcast were Red Herring and The Industry Standard. And whenever you pick up the magazine, the, the print version, uh, you'd read about a company, and it was, like, literally always backed by Kleiner Perkins. It really got me thinking about, "What is it that these folks do?" And it turns out most of the people that, that worked at Kleiner Perkins, like John Doerr and Vinod Khosla and Brooke Byers at the time, in the early, late ni- in the late '90s, were engineers who went to business school, [chuckles] usually one of two, and, uh, got into VC. And so that's sort of set my sights on, I have to go to business school to get into VC, and I-- and, and so... But the, the dream job coming out of business school was to go to Kleiner Perkins. Um, quite literally, I tried and tried and tried. Uh, it didn't work out, but eventually I did in 2017, and, and the point, uh, of, of telling you all this is that it was the most storied venture firm through the '80s, '90s, and early 2000s, and it is the firm that I looked up to, and I think many of us in the industry looked up to. And, uh, and, uh, folks like John, who I think is the, the GOAT, the best venture capitalist of all time. Two out of the six or seven trillion-dollar companies are John's Series As. And so to have an opportunity to be at the firm and, uh, put, you know, our spin on it, uh, uh, and sort of create a refounding moment of the firm in 2017, which it, which it truly, uh, w- was and felt like, and, uh, it, it is what the folks who brought me in, uh, John and Ted and Brooke, uh, w- wanted it to happen.

Jack Altman 35:17 I'm just really curious because, um, I know you've gotten a chance to learn from him. Can you share anything about John that you've been able to learn that, like, made him so good? 'Cause it seems unbelievable to win, to two Series As, a multi-trillion... Like, it just seems unbelievable.

Mamoon Hamid 35:33 John has a, a, a drive and like no other. When, when he sees something, he is relentless. He will not shake it off until he gets it, and that's how he probably pursued-- I don't know the exact stories of how he pursued Larry and Sergey, as well as Jeff, but I know that he went up to see Jeff in Seattle in his sort of makeshift loft-like building like this, uh, where Amazon was getting started, and going to the Stanford campus, where Larry and Sergey were. So once he saw something in those founders, and he uniquely has worked with so many of the greats, uh, so many hundred billion-dollar-plus companies, and is still on the board of DoorDash, still on the board of Alphabet. Um, you know, he backed Scott Cook at Intuit, Compaq Computer. The, the list is so insane with, with John in terms of, like, the number of hundred billion-dollar-plus companies. But I think he, he has a formula of identifying greatness and having this view of products and markets and people that will build probably the, the most insane companies in the space. John, I think, uh, I'm sure he's missed a few, too, but-- and he's told me about it, some of his, uh, misses, that would've made him even-

Jack Altman 36:46 Yeah

Mamoon Hamid 36:46 ... crazier in terms of what, what, uh, John's accomplishments would have been. But I think his relentless pursuit of, of great founders i- is, is, is something I've learned from.

Jack Altman 36:58 So when you came into Kleiner, what did you set out to-- what did you need to do, and what were you sort of-... planning?

Mamoon Hamid 37:04 First, you take stock of what's, what's actually happening on the ground. Uh, you come in, y- I literally spent the first two months meeting with every single person, all the way from the front desk person to, uh, our, all of my partners, uh, including former partners, uh, just to understand what made us great, what were, what were the assets, and what were the liabilities. Liabilities and, you know, what are the things that didn't work or weren't working, and, uh, having your own point of view on the things that weren't working. My takeaway was that what made Kleiner so great and iconic a- and produced these epic returns were that we were early-stage specialists who, uh, was a, which a small partnership of, um, early-stage technical people, practitioners who cared about the craft of venture capital, being in the trenches with founders, uh, really being truly their first partners and their best partners. That was sort of the takeaway of if you talk to Kevin Compton or Doug McKenzie or Joe Lacob, uh, I mean, these are, like, the epic partners of, of the '90s, um, at Kleiner. Uh, you took away like... Th- there was just-- And they were all very different. If you meet any of these folks, they were very complementary, different. It was a truly a partnership of, of, of people who wanted to be exceptionally great at early-stage investing. And we were not just early-stage investing in 2017, so we had all kinds of different products, we had different geographies, and so we brought it back to the core. You know, uh, we brought it sort of back to the future moment, uh, and that was, uh, actually our tagline-

Jack Altman 38:41 Hmm

Mamoon Hamid 38:41 ... in two thousand and nineteen when we raised KP eighteen was Back to the Future. So we went back to the future, to a small, lean team of early-stage practitioners. We did add on a growth fund later on, and there, there was a really good reason for that. But we went back to that. You know, y- you know, my partner, Ilya Fushchman, who was one of the first people I brought on because he and I saw the world very similarly, which is to, uh, you want to be small, lean team doing early stage, backing the best, uh, founder at the Series A. And actually, maybe just an aside, is w- we never had a mission statement, and so we actually created a mission statement. Sounds a little hokey, but, uh, and the mission statement is that we want to be the first call for founders who want to make history. And the history part was that this firm had made history with its investments, and I think it would be hard for some other firm to say those, those lofty words. Uh, but truly, Kleiner had made history from the days of semiconductors to then computers, to software, to the internet, those four big technology waves. Eh, if you look at the list of companies in each one of those major waves across decades, we pretty much nailed every single m- dominant company in those waves. And so how could we make history again within this, our body of work, this, this group of people, and especially now relevant to AI, how do we make history with our AI investments? And we sort of brought it back to its core and had a very distinct mission to us, and that informed what kind of people we wanted to have inside the firm-

Jack Altman 40:15 Hmm

Mamoon Hamid 40:16 ... the, the partners investing on behalf of our LPs. There, we thought we wanted to have folks who are technologists, have some operating background, but truly want to be exceptional at investing. Like, this is the, the craft and career they want to really excel at, not like, you know, "I was a founder, that was my peak, and this is, like, the next thing I do after-

Jack Altman 40:37 Yeah

Mamoon Hamid 40:37 ... I, I start a company." No, no, I, I want to do this as my career and... Which is why also we've groomed a lot of folks from within. Even though I had, uh, many years as an operator, as an engineer, so did Ilya, we, we really got into venture pretty early on, and we go- got groomed by some really amazing venture capitalists. You know, uh, Ilya was at Khosla Ventures.

Jack Altman 40:58 Hmm.

Mamoon Hamid 40:59 Got to work with Vinod.

Jack Altman 41:00 Yep.

Mamoon Hamid 41:00 And we got to work with Pierre Lamonde. Um, I got to work with Irvin Federman, uh, who was my mentor at USVP, and, uh, you know, probably the most legendary semiconductor investor. So we all had mentors, and we wanted to create a, a, a partnership where we could groom younger folks, associates, principals, also younger partners, and that's, you know, today, um, you know, some of my partners, uh, Ev Randall and Lee Marie and Josh Cohen, and so-

Jack Altman 41:28 Yep

Mamoon Hamid 41:28 ... who have really grown up in the business. And, um, both Josh and Ev were associates back in two thousand and seventeen, eighteen-

Jack Altman 41:35 Yeah

Mamoon Hamid 41:35 ... when I joined.

Jack Altman 41:36 How do you think about, on that topic, growing your own talent versus, you know, recruiting in people at the GP level directly? You know, like, when I look around at a lot of, at least in sort of my cohort of, you know, people in their mid-thirties who I consider to be great investors, a ton of them started, you know, at the firm that they're currently at and rose into a, you know, GP level there. So, you know, obviously, there's just both examples. Um, how do you think about what you're trying to do as you grow the team?

Mamoon Hamid 42:06 We typically add one person a year or so, maybe max. That's like, it's-- and there's no hard set number, uh, about growing the team because we're not trying to necessarily grow fund sizes, and, uh, so, you know, at any given point in time, we have five to seven partners.

Jack Altman 42:21 Yep.

Mamoon Hamid 42:22 Uh, and that's, uh, in the, the Yankee years, I call them, of the, of the, of Kleiner Perkins, where every year they're winning championships.

Jack Altman 42:29 It was small teams.

Mamoon Hamid 42:30 It was, like, seven partners.

Jack Altman 42:31 Yeah.

Mamoon Hamid 42:32 And so I, I think there's also, in terms of, like, you wanna be able to sit around a table like this and have great debate and conversation around, uh, investments you're about to make, and at some point, you go beyond the seven, uh, stuff starts to just be different. And there's actually research around it that suggests that there's a, the Goldilocks is probably six-ish. And, uh, and so, you know, if you're five, and someone's out that week, you know, you can't have a full conversation. If you're seven, you know, uh, maybe people aren't saying things that they want to really say because they don't want to upset someone.

Jack Altman 43:05 Mm-hmm.

Mamoon Hamid 43:05 So there's a, a number, and I think we've continued to optimize for that number. And so to your question, how do you-... uh, create that partnership, um, it's inevitable that not everyone's going to have a home run portfolio, and, uh, so th- th- those are re- the reasons usually why someone leaves. But how do you backfill, or how do you have someone-- And usually, you sort of, you know, we've tried to grow from within.

Jack Altman 43:27 Yeah.

Mamoon Hamid 43:27 And because that's so important, because your, it's culture. Uh, can you live the KP culture, which is a very much a serv- servant culture. Like, we're a servant leadership. We are here to serve our founders and to... This is not about us as individuals, it's about our job to our founders, which is to work on their behalf tirelessly to help them become successful.

Jack Altman 43:50 How do you, um, how do you assess talent on the way up? Let's say somebody's been with you for three years-

Mamoon Hamid 43:57 Yeah.

Jack Altman 43:57 -and they've got a portfolio. Do you ever have situations where somebody, their investments are good, but you actually don't believe in their future performance or vice versa? Or do you, do you sort of, do you promote inside the firm specifically based on performance? 'Cause it, it seems both clear-cut and the numbers are the numbers on one hand, and then on the other hand, there's quite a lot of, like, luck and randomness involved. And so as somebody who has now gotten the chance to see a lot of people develop, grow a lot of people, manage a lot of people in investing, what have you learned about how do you pick, you know-

Mamoon Hamid 44:29 Yeah.

Jack Altman 44:30 -career pathing?

Mamoon Hamid 44:30 There's the seeing. Are we seeing the right investments? Then, are we picking the ones that we should be in? Then there's the winning. Are we winning the ones that we should be-- Like, if we decide we're gonna invest, are we winning?

Jack Altman 44:44 Mm-hmm.

Mamoon Hamid 44:45 And, um, our internal goal is actually a hundred percent. If we want to invest in a company, we have to win it. And we keep track of the seeing, the picking, the winning, and then the hardest one to actually, which takes the longest period of time to figure out, is working. Working in investment, meaning, like, how are you helping drive the success of a, of a company? Which in many ways is the, is a function of the founder and their team, but, like, we're trying to help work it as well. If you're sort of three years in, you're, y- y- you know, you, you've, you've been seeing, and you've been picking, so we know how you see and you pick. Uh, and, uh, if you're just really good at, like, seeing stuff and some great founders and also then winning, like you're-

Jack Altman 45:28 Yeah

Mamoon Hamid 45:28 ... capable of winning what we think are the investments we should be in-

Jack Altman 45:32 Like, if you can do that whole cycle, yeah.

Mamoon Hamid 45:33 Then, then you're, you know, like... And you see that. You see that day to day. Like, you're bringing in great investments who are great founders that we actually want to invest in as a group, and then, uh, you're actually winning.

Jack Altman 45:44 And you can win them.

Mamoon Hamid 45:44 You can win them.

Jack Altman 45:45 Yep.

Mamoon Hamid 45:45 That's a sign.

Jack Altman 45:46 Yeah.

Mamoon Hamid 45:46 Okay, then now that's great. It's, it's awesome, but now it's time to show that you can work them. Uh, are they producing revenues, profits-

Jack Altman 45:53 Yep

Mamoon Hamid 45:53 ... real iconic company status, or at least are you on, on track for that? And, um, can you have, you know, per fund cycle, like, one company that we all are really proud of? You know, you know, in a fund cycle, we invest in thirty-five companies, and the math suggests that we need, like, like two outlier-type outcomes-

Jack Altman 46:13 Mm-hmm

Mamoon Hamid 46:13 ... a- and a couple more that are really great. And, um, which means that every partner has to, like, deliver a company per fund that's, you look at, it's like, "Yeah, it's a really good company."

Jack Altman 46:23 Yeah.

Mamoon Hamid 46:23 And so that becomes more apparent over, you know, from year four to seven, you know, and so... But you get to have multiple shots on goal. Uh, and so part of it's really like, can you, yeah, see, pick, win, but are there true outlier outcomes that you're producing for the firm?

Jack Altman 46:42 You said it's important to win always if you want it.

Mamoon Hamid 46:45 Yeah.

Jack Altman 46:45 Why is that? Like, why is it not okay... W- why not aim for seventy percent win rate? For like, why is it not even... Actually, maybe to ask it this way: Why would you not prefer a seventy percent win rate, which implies that there were some that you went for that were so good and got so competitive and whatever?

Mamoon Hamid 47:02 We actually have a lower rate at the seeing. We don't need to see everything. We don't need to be fully exhaustive at seeing. And internally, like, our target is to see sixty percent of all Series A's that get done by our peer group, peer set.

Jack Altman 47:13 Series A is what you care the most about?

Mamoon Hamid 47:14 Yeah, that's where we measure it religiously. Like, we look at it on a weekly basis.

Jack Altman 47:19 Wow!

Mamoon Hamid 47:19 We look at our, like, what Series A's were announced, did we see it or not?

Jack Altman 47:23 Mm.

Mamoon Hamid 47:23 And seeing means you actually met with the company-

Jack Altman 47:25 Mm-hmm

Mamoon Hamid 47:25 ... not just like you heard about it.

Jack Altman 47:26 Yeah.

Mamoon Hamid 47:27 You, you saw it.

Jack Altman 47:27 You spent time.

Mamoon Hamid 47:28 You spent time on it.

Jack Altman 47:29 Yeah.

Mamoon Hamid 47:29 Yeah, and you deliberately decided to not do it. Like, there was a decision made by, by you as a partner, uh, as a team, we all... Uh, and so that's where we really keep it looser because you don't want to be so exhaustive that they're just chasing around-

Jack Altman 47:43 Right

Mamoon Hamid 47:43 ... companies just because you heard someone's raising a Series A. Uh, y- you wanna have a real look at it and real assessment of the company and have a point of view on it. On the, the winning piece, we believe that, you know, and then you pick. You know, if we decide to pick, we decided, like, we wanna do this, let's go win it. Let's go do the full team tackle. Let's use all of our resources to win and convince founders we are best suited to help them win, and that comes via, uh, endorsements from our founders. You know, uh, getting, uh... And that's usually the, the biggest thing, is endorsements from our founders. It is they see some of the work that we do for them, with them. But w- we have to win because we have the wind in our back of, like, the brand of Kleiner Perkins, we have the resources of Kleiner Perkins, we have endorsements from founders.

Jack Altman 48:30 Right.

Mamoon Hamid 48:30 Like, we, we... There's a network. Like, a- and we feel like we're best suited to be that Series A partner, and if you decide otherwise, we're gonna look back and introspect on why we didn't do better for you-

Jack Altman 48:43 Hmm

Mamoon Hamid 48:43 ... why we couldn't convince you better. Because we believe our track record from Series A to success is very high, and why would you not want to work with us? That's how we believe. But if we, if you don't pick us, um, we have to really introspect. And we actually keep a spreadsheet of all the losses at the... And then we revisit them at every off-site.

Jack Altman 49:03 Hmm.

Mamoon Hamid 49:03 And we look at like, okay, did we miss the good ones or the not-so-good ones? Uh, and what was missing in our playbook as to why we didn't win that, that investment?

Jack Altman 49:16 ... This maybe takes me to, um, what one of the things I most wanted to talk to you about and try to learn from you is what I perceive around incredibly good picking over a lot of years into a lot of interesting companies. And, you know, I'm sure I'm gonna be missing some, but just, like, off the cuff, I can think of, you know, we talked about Box, there's Figma, there's Applied, there's Rippling, there's like-- there's more. I know there's a lot more.

Mamoon Hamid 49:40 Slack.

Jack Altman 49:40 Slack.

Mamoon Hamid 49:41 Glean.

Jack Altman 49:42 So, all good ones. Um, very good. Like, past a point where it's, like, looks lucky. You know-

Mamoon Hamid 49:46 Yeah

Jack Altman 49:46 ... it looks like something's going on. You just talked about, you know, being able to win all the time. I guess the first place I'm curious to ask about is, were those investments hypercompetitive when you did them? And was winning a huge factor in them, or when you look back, is the part that you're more proud of, that you picked something very accurately? Like, did everybody see that they were good and you just won, or did you have an insight other people didn't have?

Mamoon Hamid 50:10 Yeah. Uh, if I look back at Box and Slack, which chronologically were the first two that you mentioned, um, those were not competit- not competitive. I think there were n-no other offers at the time of investment. Uh, Box for sure, because Aaron was having a hard time raising, raising a round. Slack, it was just too early-

Jack Altman 50:30 Mm-hmm

Mamoon Hamid 50:31 ... for anyone else to take note of their, the early success. And, uh, maybe just to break it down a bit in terms of, for most of my investing career, I've, I've really been excited about productivity. Uh, and that sort of goes back into my growing up in Germany, where everything's so efficient, so productive, and you're, like, constantly thinking about, "Okay, how do I make this more efficient? How do I make this more product...?" So, and I always saw that software in the cloud, lots-- way better experience to, for productivity than, you know, desktop software and all kinds of other ways of doing work. And so, and I, I made this sort of k-kind of like a major of mine, is workplace productivity.

Jack Altman 51:07 Mm.

Mamoon Hamid 51:08 And so when you find, uh, encounter a founder like Aaron around big categories of productivity, you, you sort of-- they see the world the way you see it, and you, you wanna back them. And, uh, so you have a, what we call a prepared mind. You approach it with a prepared mind, so you already come into the meeting with a bit more of a... You're leaning in before you even met them because you, you know what they're doing. Uh, in the case of S-Slack, just to give you a sense, like, it, it was a, you know, a gaming company that had pivoted, become this, this, uh, this chat, uh, IRC thing, and, uh, we'd heard that a few of our companies were using it, and one of the founders we backed were really like: "Hey, like, we love using this thing." And, uh, and it was, you know, a few thousand users, but there were other, other, lots of other chat products.

Jack Altman 51:52 Mm-hmm.

Mamoon Hamid 51:52 And by the way, like, you could say, like, "Why not just use iMessage, or why not just use Gchat?" And there were a few other products like it. So it was easy to dismiss it at the time, but what you couldn't dismiss was the level of engagement. Uh, and I think at the time, no one was asking some of these-- this is, like, two thousand and thirteen. No one was asking, like, the engagement questions-

Jack Altman 52:10 Mm-hmm

Mamoon Hamid 52:11 ... uh, around, like, you know, L28 or Dow Mao. It was not a thing for enterprise software products.

Jack Altman 52:17 And the engagement there was insane, right?

Mamoon Hamid 52:18 It was insane. It was like a fifty percent Dow Mao, uh, four hours a day inside of Slack. And I think just being a little bit early on-

Jack Altman 52:25 Mm-hmm

Mamoon Hamid 52:25 ... into understanding what was really happening with Slack and not dismissing it-

Jack Altman 52:29 Mm-hmm

Mamoon Hamid 52:29 ... and actually somewhat overpaying because, and making an offer they couldn't refuse.

Jack Altman 52:34 Yeah.

Mamoon Hamid 52:34 You know, at the time, like, investing twenty-five million at two hundred and fifty post for a Series A company felt insane in two thousand and thirteen, fourteen.

Jack Altman 52:42 Yeah.

Mamoon Hamid 52:42 But what's-- I would say across the board between Aaron at Box, or Stewart at Slack, or Dylan at Figma, or Arvind at Glean, they're all in this general, like, workplace productivity category-

Jack Altman 52:55 Mm-hmm

Mamoon Hamid 52:55 ... but they were pretty product-obsessive founders who had poked so many holes at their own products, and as a, I would say, product-obsessed investor, I actually don't give product advice because if I've invested in a product-obsessed founder, it would be quite the, uh, insult to them-

Jack Altman 53:15 Hmm

Mamoon Hamid 53:15 ... to tell them where they should improve their product. But you're finding people who are way better than you at, at certain things, which is a product, and building in categories and areas that you care about, so file sharing in, um, collaborative design, in workplace communications, in enterprise search. And these folks all had, like, deep, deep ties into this for many years, even though they were fairly young when they started. A couple of those folks were very young when they started. Aaron was twenty-one. I think Dylan was maybe all of nineteen or twenty when he started Figma. And in the case of Figma, you know, it, it was also just sort of post-launch product.

Jack Altman 53:50 Mm-hmm.

Mamoon Hamid 53:51 And again-

Jack Altman 53:52 Probably not super competitive at the time.

Mamoon Hamid 53:54 It, it-- I think they had other offers, but, but they were a company that had been around five years.

Jack Altman 53:58 Right.

Mamoon Hamid 53:58 Uh, I have a history of investing in companies that have been around for a while before I invest in them-

Jack Altman 54:02 Mm-hmm

Mamoon Hamid 54:02 ... but the next, the, the new thing or the, the product they launch way, many years in is the thing that works.

Jack Altman 54:08 Yeah.

Mamoon Hamid 54:09 And in the case of Figma, five years in, you launch in July of twenty seventeen or something, and it starts to take off a little bit. And but it's-- the N is so small, and if there's one learning I've had over my career, is like, or one thing I've used a lot, is small N, high engagement, is a really good signal to invest in a company.

Jack Altman 54:26 Mm.

Mamoon Hamid 54:27 Uh, a- and get early, get in earlier, not competitive, better pricing, all the things that come with it, hence better returns for our investors.

Jack Altman 54:36 Yeah.

Mamoon Hamid 54:36 Uh, and, you know, you asked, like, so what are the things, the unifying sort of-

Jack Altman 54:39 Yeah

Mamoon Hamid 54:40 ... archetypes here? I would say one is the product-obsessed founder, and the other archetype is the Parker at Rippling-

Jack Altman 54:47 Mm-hmm

Mamoon Hamid 54:48 ... caster at Applied Intuition is visionary, but the one thing they're better at than being a visionary is just an execution machine, and run through brick walls, will the future towards themselves. Like, who, like, if you think about what Parker's built with Rippling, like this compound startup beyond just an HRIS to, to Finance Cloud, to IT, um, and lit- literally, like, twenty-five different products now, is you kind of have to will that to your way.... the, the world your way to, to do that. And the same thing with what Castor has done at Applied Intuition. Going into automotive and selling software into, like, the automotive industry is like, you say that's, like, DOA.

Jack Altman 55:33 Mm-hmm.

Mamoon Hamid 55:33 You don't even go there as a startup. And what he did with the vision and selling and being very methodical and surgical about how to pursue his customer base and becoming sort of a de facto solution for, like, almost the whole automotive industry.

Jack Altman 55:48 How do you figure out when you're spending time with a founder, whether they are one of these things? Like, is it intuition? Is it, like, you've been doing this for long enough that you have a strong intuition? Is there some process to it? Do you just know it when you see it? Like, is there anything learnable from you about finding these founders? You know, 'cause obviously, it's-- we all know these people now, but at the time you did it, you know, other people got to meet them, too, and not everybody saw-

Mamoon Hamid 56:12 Yeah

Jack Altman 56:12 ... the exact same thing.

Mamoon Hamid 56:13 You know, I'm, I'm looking for intentions, like, true intentions. Like, you really want to be doing this and doing this for the next decade of your life.

Jack Altman 56:22 How do you figure that out?

Mamoon Hamid 56:23 Just from conversations and things that are said, even unsaid, body language, what motivates you, what drives you, why you're willing to commit your life to this. You sacrifice family, other things in life, to go do this. It's a bit of like the je ne sais quoi-

Jack Altman 56:44 Mm-hmm

Mamoon Hamid 56:44 ... you know, around, like, the person. You know, you've been doing-- and, and I'm, you know, I'm an engineer by trade, but, like, I, I look for the EQ and, like, use the EQ I have to figure out, like, some of those things of the other person. And, uh, yeah, like, good people, moral compass-

Jack Altman 56:58 Mm-hmm

Mamoon Hamid 56:58 ... North Star. Like, you, you, you sort of like, are you doing it for the money? Are you doing it for fame? Are you doing it for power?

Jack Altman 57:06 Mm-hmm.

Mamoon Hamid 57:06 We talked about this earlier. Or do you just really want to solve problems that exist in the world, and you're uniquely capable of solving these problems?

Jack Altman 57:14 You talked about how, you know, Series A is the thing you care the most about. Obviously, the context that you're running the firm in is both, like, storied firm with, you know, infinite sort of brand and access both to entrepreneurs and dollars, and you also have, you know, the sort of keys to do what you'd like with the firm. And so you could have run a lot of different strategies here, and you've picked a particular one. Can you describe the strategy that you s-- you know, would say you're running and why you picked that for KP?

Mamoon Hamid 57:46 Yeah. As I mentioned, we have an early-stage fund. Today, that's eight hundred million dollars, and, uh, the strategy there is we invest in about thirty-five companies per fund. And in order to return a five X on that fund, uh, we need to have... You know, that'd be, uh, four billion dollars, which means that that basket of companies has to be worth forty billion and us own ten percent of it-

Jack Altman 58:07 Yep

Mamoon Hamid 58:08 ... okay, for the math to work for us. And the simple math, out of those thirty-five companies, you need to have two fund returners that, that get you pretty close to the, the five X.

Jack Altman 58:18 Mm.

Mamoon Hamid 58:18 So that's one part of the strategy. The other is, we have a select fund, uh, which, uh, is, is today it's, it's a billion, one point two billion, and half the dollars typically go t- into our best companies like Figma, Rippling, and Glean, um, and, and, and Harvey and others. And so where we double down, we use it as a vehicle to double down into companies we're already on the boards of, we're already heavily involved, uh, all the resources of Kleiner Perkins are being applied to it, and where we just see that this is just-- has greatness written all over it. And sometimes you can sort of preempt it and do it very easily with the founders, where it, it's easy for them, it's easy for us, and we want to put-- give them, give them more. We've done that many times in the last few fund cycles. Like, it's literally, it's like half the fund is, is those companies. And, um, that's... The other half is then n- things that we missed at the Series A or B. You know, we see a large swath of the companies who inevitably we're gonna miss-

Jack Altman 59:17 Yep

Mamoon Hamid 59:17 ... and not pick well [chuckles] at the A and the B. And if we really kick ourselves, like, we'll, we'll do, like, one to two of those a year, where we, we missed out on the A and the B, and we're gonna do it out of the growth fund. And so this allows the, the, the one partner group to, to do-- invest out of both funds, and it keeps it still very manageable. We all are based in one office, uh, well, two offices, San Francisco and Menlo Park. We all go to the office on Mondays in Menlo Park for partner meetings. We all sit together, and-

Jack Altman 59:45 Yeah

Mamoon Hamid 59:45 ... we get to see each other, like, multiple times a week, and that's by design. It's by, like, trying to use a table like this to make good decisions, sitting around the table, d- debating, discussing, uh, making decisions together.

Jack Altman 59:57 I don't know if this is fair, but it almost seems like what I'm hearing is, like, as big and impactful as possible, constrained by this one table situation.

Mamoon Hamid 1:00:05 Yeah, and I think just to take that, the, the context of we're in San Francisco right now, and if we all know what's going on in San Francisco, in fact, like, in this, like, five-block radius of here, lots of in- incredible stuff is happening. And if even just half of all the amazing stuff that happens in tech still comes from San Francisco to, to San Jose, and we're there, that's plenty of pie to eat.

Jack Altman 1:00:29 Yep. You don't need a Europe office. You don't need to be all over the world.

Mamoon Hamid 1:00:32 Yeah.

Jack Altman 1:00:33 To, maybe to wrap up, I'd be curious to hear, and I haven't gotten to spend a ton of time with you outside of this, and so I'm just interested, what else in your life is important to you, and, like, how that balances with, you know, your work, which obviously is, of course, very central to, you know, your life?

Mamoon Hamid 1:00:50 Yeah. The, the only thing that's more important

Mamoon Hamid 1:00:52 to the work that I do is, uh, obviously my family. Uh, I have a wife and four beautiful children, and, um, and, um, I was telling you earlier, I got to go for Hajj this year, uh, so the pilgrimage to Mecca that, uh, every Muslim is supposed to do once in their lifetime, and it was quite the, the spiritual journey for me, uh, especially in a time when, uh, a lot, a lot of life hit us, uh, in our family, actually. And so faith is really important to me, and it's also, um-... deeply rooted into every encounter that I have with every person. Part of the beauty of Hajj is that it is two million people who come from all walks of life, and they have all the different skin tones in the world, uh, but yet in front of God, we're all one, and we're all the same. And, uh, and it just, uh, roots you into how do you treat each other as human beings, and i- it is sort of the moral compass that I, I have around, like, every interaction matters, uh, whether it be with a six-year-old child or a thirty-year-old, you know, a billionaire founder. And how do you treat each other? How do you, you know, give them the respect, the dignity, uh, and the attention in that moment in time? And so, uh, I've sort of tried to live my life, and it's a-- I get to remind myself of that, you know, uh, through, through, through faith every day, that, you know, there's a, there's a reason you're, you're supposed to do things a certain way, and a decorum and an etiquette and, uh, a way of life that, um, you know, just is-- it shows gratitude, but also, you know, shows up. And I think, um, I try to bring the best version of me to every meeting. It's not possible. [chuckles] Uh, but it is part of, like, the... I think of it, I put myself in the shoe of a founder. Typically, pitching to VCs is, like, a really, um, uh-- it's like the biggest thing you could be doing in that moment in time. Uh, and it's intimidating. Uh, you're trying to raise capital. You're putting yourself out there. And if I can make them feel just a little bit more comfortable and more respected and ac- acknowledge the work that they're doing and the, all the blood, sweat, and tears that they're putting into this and the family sacrifice they're making, and just, like, empathize with that and have some humility around what they're trying to do, I think we can just make that experience a lot more just, just better for all of us.

Jack Altman 1:03:13 Yeah. Well, that's awesome. Well, thanks for sharing that, and really appreciate you making time for this again. This was, this was great.

Mamoon Hamid 1:03:18 Thank you, Jack. [upbeat music]