You Had to Know the Future to Beat John Doerr in the 1990's

Okay, to understand Benchmark, we start in the 1990s in Silicon Valley, but I don't think you can actually start with Benchmark. You have to start with another firm. I'm sure you know what that firm is.

Are you going TVI? Are you going Merrill Pickard? Or are you going somewhere completely different?

[laughs] Somewhere completely different, but I bet you can guess it.

Uh, the eight hundred pound gorilla, Kleiner Perkins?

Indeed, indeed. Uh, not just Kleiner Perkins, but specifically John Doerr's Kleiner Perkins.

After a very successful generational transfer of their own from Kleiner and Perkins to John Doerr.

Here in the 1990s, I mean, John Doerr, we've talked about him this season on the Amazon episode. I mean, he was alone the eight hundred pound gorilla in the VC ecosystem in the early 1990s, and specifically leading up to and during the internet era. You know, you think today of the top VCs, the top VC firms, you think Sequoia, you think Benchmark, you think Andreessen, Founders Fund. He was all of that, all in one. He was just absolutely at the top of his game. He had joined Kleiner. He did not start his own firm. He started his career at Intel working for Andy Grove. And from that, sort of just like Don Valentine when he got into the business, and Don, in his very Don way, said he had an advantage, he knew the future. John also knew the future. He saw the PC wave coming. He did Compaq, he did Intuit, he did Sun, which wasn't the PC wave, but it was in that era. And that, of course, led to Vinod Khosla then joining Kleiner and, like, this dominant franchise. And then when the internet started, man, he did Netscape, he did Amazon, as we talked about. He did Google. If you were an ambitious young venture capitalist in the 1990s in Silicon Valley, and that was a big if, you could do very well as a venture capitalist in that era without being ambitious. But if you were ambitious, boy, you needed a damn good answer about how you were gonna beat John Doerr.

Oh, yeah. To set a little context for how you could do well even if you weren't ambitious, there are one hundred times as many venture capitalists now as there were then. Those businesses didn't have the economics, either in terms of gross margin or addressable market size or zero distribution costs. All the things that make big tech big tech now didn't exist then. So for a while, the capital base and the number of venture capitalists actually made sense with the much smaller technology ecosystem. But there were always those few years of basically arbitrage, where innovations happened that made these much more interesting investable categories, but there were still only a few venture capitalists looking around at each other like, "Oh my God."

And valuations were so low. I mean, it was crazy when John and Mike Moritz did Google at a hundred million dollar valuation in the Series A. You know, that was earth-changing [laughs] . So to understand John, you know, we've painted the picture of how dominant he and Kleiner were. There were two very specific aspects to his style and Kleiner's style. One was he was unquestionably-