Sequoia's Doug Leone on What Has Been Instrumental To Scaling Sequoia Over Generations

Well, some of the training for that cold call came from my sales days. And when you sold computers back in the late seventies, you had to get past what was then called the secondary to get to someone who might have a budget. And so it was really no different. And the lady who answered the phone, she was not a secretary. I did not know that. She was the right hand person of Don Valentine. She was a shrewd, tough, great sense of humor and New Yorker who would not be bullshitted, if you will, by anybody.

We started the call. I quickly sensed what she was, and we had an honest and real conversation, a firm conversation between two people who had spent a lot of time in New York, and we hit it off. And I was told afterwards that she walked into Don’s office, and she said, this kid may have something you might want to interview. And that’s what led to my 5PM Monday meeting with Don Valentine.

It was a tough meeting. Don had a little round table at the corner of his office. Don was the kind of person that silence would not bother him. In other words, if you answered a question, he could sit there for thirty seconds in dead quiet and his heart rate probably wouldn’t increase what yours probably doubled. And so he asked me one question, What’s important? And I rambled for maybe four or five minutes, and now it was followed by dead science. It felt like an hour. I’m sure it was twenty seconds.

And then he said to me, what else? And I started laughing. And I said, what else? Don, I gave you everything I have. And then we warmed up from that point on. And I think what Don noticed that he had someone who was an a missile, back then, I’d say an unguided type of missile, but someone who had the courage, the humor, and from his point of view, who looked at business from the customer in, not from the technology out. And he liked that as a compliment to some of the people who had at Sequoia that looked everything from the tech out, and which is why he hired me.

Things have changed because the type of questions you can now ask are very different than the types of questions you can once ask. But I have some favorites, and I said, I don’t want to get too personal, but I ask them if they have a sibling close in age, and then I ask them, use three adjectives to describe your sibling, and I make it very clear this is not about their sibling, and to describe themselves by comparison. And so, you know, in the law of diversity, two siblings are less likely to be alike than two stringed.

And so, how they describe their sibling is usually the opposite of how they describe themselves. It’s a self awareness question and so on. So I always like that. I like to ask, what are the things that you’ve always done well because of genetics, because of early upbringing, and the things you struggle with that you have had to improve on because you are a smart person and you’re tired of making the same errors over and over again. I really try to get into not the professional quality of the individual, but more of the personal quality.

It takes about thirty minutes for someone to relax, which is why I refuse to interview someone for thirty minutes. After thirty minutes, then I ask a little more about business, the key drivers of a company to them, why they did certain things and so on. But I focus very much on the why and a lot less on the what.

Lots of great lessons. First of all, it taught you the simplicity of everyday life and what’s really important. It also taught you how to live within your means. If your dad or your mom is making $25 and you have no debt, you’re living with that $25. It taught you the value of education because you don’t wanna grow up and make $25. I remember wanting to go on a date, and the only car I had was my father’s car with a bastion driver’s side door. And let me tell you, that builds character.

It taught you hunger.

You know, I hate to admit that was my only date in high school. My only one. And it taught you hunger. Because if you want in anything, I made it, it became very clear it was up to me. Not a lot of people have trust funds. I certainly didn’t have a trust fund. I had parents who could pay very little for my college education. I had to take loans and scholarships. And I benefit from scholarships from people who I would never meet, which is why the first thing I did when I made a little bit of money, I created scholarships in the honor of my parents at Cornell to return the favor.

But it laid a solid foundation of good values and a fear of what you didn’t wanna be when you grew up. And so as years went by, this would serve me extremely well.

So people have called me more than once a bit of a control freak. I can make the trains run on time. If you ask me to take a hill or to get something done, I will commit to you that things are going to be done on budget and on time. If I’m on the board of a company that fails, it fails in a very organized way. If I’m lucky enough to be on a company that succeeds extremely well, it succeeds in a very organized way. But I knew that those traits were not conducive to being a leader.

Those are great traits for being a manager. And I read a whole bunch of books. As soon as Mike Moritz has stepped down, I went to the bookstore, I might have bought 20 books on leadership and I might even have read another 20. And it became clear to me what leadership is and what management is. And leadership is really a vision, it is inspiration, it’s execution, it’s instincts, It is not just let the trains run on time at all costs. And so I understood, if you will, to let the horses run, to hire great people, set the direction, let the horses run, use my instincts a little more.

And again, I mentioned self awareness. I think that is one of the greatest things. It’s good to know. It’s good to not know, which means you can learn. It is not good to not know what you don’t know, and that is the killer. And I was lucky enough to know what I didn’t know and do something about it.

So the first thing I did when I took over at the sole you know, whatever title that you wanna give me at Sequoia, the leader of Sequoia, I wrote the tenets of Sequoia Capital. It’s a play on words. It was 10 tenets. And I put performance of as one and teamwork as two. And you’ve heard me say in other interviews that if you’re missing one, the other nine don’t matter, and if you have one, then you better have two. Teamwork. We hate the I pronoun at Sequoia Capital.

In order to perform, we can’t be a family. We all have family members we’re stuck with. I know your family, I’m willing to bet you can point to a family members that is gonna be a family member forever and is not a performer. I know we have a few in our family, but we are a team. It could be a production company. It could be the making of a movie or a show. There are actors. They’re called the investors. They’re supporting casts. They are the producers, the writers, the lighting people, even the people that make lunch for the actors and everybody else.

Same at Sequoia, we have people who invest, people in data science, our systems, finance, and so on. And we better have high performance in all those areas, and we better have a good deal of expertise in using the we pronoun. That is the only chance we have. And if you don’t perform at Sequoia, we will give you some time. We will figure out a way to help you. But at the end, the very first person that knows they’re not performing is the individual himself or herself.

And then when we part ways with people, it’s usually with a little bit of forward vesting, a little bit of forward payment, a hug, and how can we help you. We’ve learned not to make enemies with the few people with whom we part ways.

Keep in mind that the venture business is a latency business. If you’re investing a hedge fund, you have a mark at the end of each day of how you’re doing, and you can actually have a numeric score every day, every week, every month, every year, every three years, however, while somebody does. In a venture business, you make a seed investment, you might not know the answer for twelve, fifteen months. There are some indicators as a company on plan, not on plan and so on. But it is a latency type of business, so you have to be almost a hawk, point one.

Point two, you have people of different age groups and different experience. And I found possibly because I was one of those candidates, you want to give young people a little more runway. I will tell you there were people who wanted me out at Sequoia Capital after twenty four months, and it was only through the good graces and good judgment I now say from Don Valentine that I’m still here. And so we’ve learned to give people some time. Keep in mind, the people we hire are not the people who are the quarterback of the football team.

They weren’t the popular kids. They’re a bit of the outlier kids. They are the people that spend time alone. Most of us, Devin knew that we pronoun coming up because we is taught in team sports and all those things. I think that most of us were quirky, loner type of individuals. And so we bring them in. We want them to really work on their incredible trait, we want to take advantage and I mean in a good way of the incredible trait, round them off any other traits so they become sufferable, because I was insufferable and I became sufferable, and then we teach them to use the we pronoun.

Teaching someone to use the we pronoun is not just words, not just culture. You’ve got to get the compensation right. Because if you say we, we, we, and one person is the one that makes all the money, It’s a lot of words. What you’re doing is talking the talk and not walking the the walk. So we’ve learned to get all the aspects right, including the compensation piece. What does that mean getting the compensation piece right? It means not having Susie make 3% more than Johnny. It means saying either you’re in or you’re out.

And if you’re in as a partner or as an associate or as, something in between, there are compensation level and when you finally make a partner, there’s not 14 levels. We don’t use the word junior. We even call in The US associates. We even call them partners. There’s no need to belittle them in public. If I’m in a meeting with someone who’s 24 years old, I don’t have to say this is our associate. Everybody knows this is our associate. And so to make sure we show people the right level of respect, we give them the right level of feedback, at times means giving them more feedback, at times giving them less feedback.

You want them to struggle at times and overcome the challenges in front of them just to make them better. It is getting all these things right and at the end of the road, if you’ve seen all these monkey experiments where monkeys are being given, they love grace but they love the bananas over grape, one monkey then will get a banana and second monkey then will get a grape. And the monkey that gets a grape throws a grape out the cage. Screw you. You gave him a banana.

I want a banana too. And so we’ve seen all those experiments. Just make sure we get those things right so that everybody feels they’re treated fairly. And basically, I tell founders the same thing I say internally. Assume that everybody’s comp is posted someplace in the office, and everybody has to feel good about it. There are always some people that they’ll never feel good about it, but we can’t help that. It’s gotta be a fair system where producers get paid, and we don’t have 19 levels, mechanical levels.

You’re now VP one a, VP one b. We don’t do any of that.

Two or three things. One, most of our clients are endowments and foundation, and we take that very seriously. Why should I limit myself in what I can invest in a venture fund for a very rich private wealth operation or someone who’s worth 22,000,000,000? Why should I make a rich person richer? So first of all, we’re mission driven. Second, we take our position in between these nonprofits and the people that can see the future, these founders, very seriously. Third, they know we are incredibly fair. We’re successful.

We are very insecure. The type of person we hire, as I said, is by nature person. An insecure person that has something to prove, maybe their brother beat them up a little bit, they wanna show how much better than their brother, or their mom and dad didn’t tell them I love them one extra time, or something happened in their upbringing that puts a drive in these folks that never goes away. I will tell you that most of the investors at Sequoia grew up in very modest means.

We are fair, we want to win, we are ultra competitive, and we believe. And we do this every day, starting with me and the more senior people. More cases at Sequoia where partners have been asked to be paid less rather than be paid more. I want you to hear that. I’ve been in more meetings in my thirty years at Sequoia in people asking for less compensation rather than more, so we can spread it around to other people. When you put all these things at work, including the success, including the rides, including using the correct words.

We’re not investors. We’re business partners to founders. It is not a deal. It’s a company. You’ve got to get even the words right to really mean everything. And you’ve got to pay attention to all the little things. And furthermore, we’re so insecure, we’re always asking ourselves, how do we put ourselves out of business? Because if we don’t execute those things, somebody else will. We know by definition, there are partnerships and firms every day that try to take it to us, that try to put us out of business.

We act very aggressively, we are fearless about taking chances, we don’t want to risk the franchise by doing something stupid, but the only way to stay alive is to take risks. And that’s embedded in our DNA because at the end of the day, while we have all these lines of businesses, we have venture investors at heart. We are much more comfortable with someone who is a 22 year old young person that has a vision than someone that looks like Doug Leone. How’s that for a sentence?

I I probably broke some cultural norms by saying that, but that’s what I

Well, look. Over the years, we have had numerous entrants trying to change the game. First of all, it’s not the game. Remember, said we gotta get the words right. It is a business where people lives are at stake, their careers are at stake, I should say, and capital for investors, in our case nonprofits are at stake. So we don’t view it as a game as all. Second, once upon a time before your time, there was ICG, CMGI, firms that institutionalized things. Now we see Tiger, while we had SoftBank a few years ago, Tiger now.

There’s all these attempts to short circuit what we do. What we do is company building. We’d like to get there early. We’d like to be the first investor when there’s one employee, such as Nubank, since you said that you talked to David, and help set the DNA. And then stay with these companies for the next fifteen years, maybe twenty years. Like, which is why we now have a hedge fund, because we’d like to say we want to go from seed to IPO and beyond. And doing that takes headcount, takes time, it takes a lot of things above and beyond trying to be an index fund for every Series B out there.

And we believe that what we do will form a competitive advantage if we do it right. So what we tell founders, you’ve got to get product market fit. If you can’t get product market fit, I doubt Sequoia Capital or any one of us can help. That is the black magic. That is really the art. Once you get product market fit, we can help you with everything else. We’ve done that a thousand times, we iterate on how we do things, whether it’s hiring people, the type of people, when, how, customer introductions, board building, a whole bunch of other knowledge.

Product market fit is yours, we do everything else. You cannot do what we do if you’re investing in five deals a week. There’s no way to do that.

It screwed me up. And the reason How so? For it, well, it’s even worse than that. While the first three year IPOs, the next four were nice M and As. So I got a blazing start. And why is it? Because I landed in the middle of the land. I landed at the beginning of software. So I was in the right place, right time. It was as much done to skill as it was to luck. I wanna be perfectly frank. But it gave me a false sense of confidence.

Boy, here I am, I know what I’m doing. And so in 1999, 1998, I jumped in with both feet, both arms, I had the whole body into telecom optical networking, that was going to be the best thing. And one day I woke up in 2000, I was on 12 boards and there wasn’t a winner there. Now that was a teaching lesson. I will tell you, I learned more from that lesson than I did from the first seven wins, three of which were IPOs as you mentioned.

It learned that I didn’t know much. It learned that I had to do careful due diligence. It learned that I had to raise the bar by a whole bunch. It humbled me and it also taught me when I became a leader, when and how I should help people. I went through the abyss on my own, and I came through the other side. But people are different. There are some of our partners that went through the same thing that I made the judgment call, leave them alone, let them come out themselves, and there were others that I didn’t think they could and they need a little bit of a hand, and they made it to the other side, and they’re terrific investors.

But I’ve learned the value of the abyss, and the abyss has huge value.

So when someone finds themselves on the abyss, if they start to fib on their performance of the companies, if they wanted to continue to invest at rapid pace, almost not really caring about the mistake, there are some investors who, yes, like a baseball player, you have to forget about the last of the bat or as a goal scorer, you have to forget about the last game if you didn’t have one. I find people that lack empathy in some ways are a little too easily forget about the 40,000,000 they lost, a little unnerving.

I was never able to do that. Those are the telltale sign. They’re political, they rally the troop on the inside, they hide between right behind the votes of senior investors. Those are all the negative traits. Conversely, someone that fesses up to what they have takes aggressive stand in helping those founders realizing in many cases there’s no market for their business. They develop an area of expertise. They become ultra focused and are twice as careful in what they do. They’ve been humbled to death. Those are the great sign, in my opinion.

I think early on, a pat in the back, a reminder that maybe five out of ten, six out of 10 investments don’t work, and let’s keep on going. That’s all that you need in someone that does that. I don’t think the first bad investments is as dangerous and as fruitful a lesson as waking up one day and you’re in six boards and you’ve got four bad investments, because that takes a a whole bunch of time. I think the first bad investments, it’s a lot easier situation from which to recover.

First of all, stop using the game on the field, deploy, deploy, deploy. Let’s change the question. In a world where the breadth of opportunities has never been as broad, if you look at the number of $1,000,000,000 market companies or $10,000,000,000 or $100,000,000,000 market cap companies and you compare 2005 to now, it’s a drastic number. It’s a drastic increase. And furthermore, the largest increase in the number of largest companies in percentages. Okay, so you have to recognize that the opportunities are getting broader, but at the same time, you have to recognize competition has gotten greater, and we face irrational type of competitors.

And so that is the situation analysis. And so it does become a pick them business, meaning deploy, deploy, deploy, it’s a pick them business. The further you are to the funnel, seed investing in the top of the funnel, the broader you can be. And you can, you know, at the end of the day, what is seed investing is a smart person in a generally interesting area. That’s it. There’s no need to overthink it because they’re going to zig and zag in ways that you can’t predict.

As you move down the funnel, venture, growth, pre IPO, the checks get larger, the valuations get a lot higher. And the further down you come, the better you have to get up picking them. And if you go broad there, you’re going to get stung. And so the further up you go, the looser you can be in a new aperture because that’s part of top of funnel. That is the mandate of top of funnel. But as further down the funnel you go, further down the river you go, the better you have to get at picking them.

And if you pick them right, you’ll be rewarded at the end because of the large market caps being created. But if your attitude is invest, invest, invest, price don’t matter, don’t matter, no matter, That is going to serve you well in a momentum driven economy and may serve you well for one fund cycle, maybe two fund cycles, as long as the momentum increases. You’ve got a public market adjustment after a twelve year bull market or soon to be a fourteen year bull market and prices adjust by 40%, you’re in a world of hurt.

So I think you’ve got to go during these times, the further down the funnel you go, the more attached to quality you have to be.

Well, I’d say when you lose the early stage of building a relationship with the founder, you become private equity. So what I mean by that is they already have their boards, they already have relationship, and you become a price taker. And they’re selling things that you have to a founder, how you can help them become less and less. Now, we are lucky enough that we have operating people. I think we have the best people in any partnership. In engineering, Bill Korn used to run Google search.

In Bogomile, who did the same at VMware in product management, product marketing, and Karl Leschenbach, he probably knows, who ran a sales operation from 60,000,000 to 6,000,000,000, and so on. And so what you need is the larger you go, the later you come near these companies, the more you have to convince the founders that you have real operational muster to help them. So why were we investors in Zoom? I can tell you that Eric Wan didn’t need money, but he needed Carl Eschenbach. And the same can be said for many of us.

It’s happened many times. Same thing with ServiceNow and me and so on. But it is better to do this at the seed stage because then you can help them set the right DNA and so on. And of course, if you come even later, at that point, they have everything. They have Karl Leschenbach or Bogumil or Doug Leone. At that point, it’s purely price. There’s nothing to tell a founder. We can help you with the IPO. That is a commodity type of benefit. That help can be gotten many different ways.

And so you want to get early. Now going that early isn’t just writing checks early as these latest stage partnerships now are looking to do. Let me get into As because they’re missing the company building know how. They’re missing the forty nine years, fifty years of expertise. And that’s what we can bring to the table. So it’s not as easy as investing early. It’s everything else that goes with investing early. That’s the tough part.

So I wrote a memo in o four, one page that said, I don’t know if we’re doing this for defensive reasons or offensive reasons. I was noticing that the founders in California were many ethnic founders from India, China, Italy, France, all over the place. And I said, I don’t know what’s gonna happen twenty years from now. And I remember saying, if NEA has posters from Chinese or India companies in their offices, and we’re attracting US based Chinese or India founders, are they gonna come to us or are they gonna go to NEA?

I consider that defense. And then I made a point of where are the largest and growing economy? And it was BRIC. In Brazil, India, China, and we prioritized them. We said China one, India two, because if you want to be a partner to the most valuable companies in the world, which is our mission, it could only happen in large economies. It’s not going to happen in Thailand, a small economy. And so we decided for defensive and offensive reasons that we needed to be in these other locations.

And so two of us went shopping for contacts for teams, first in China, then in India, and that’s how we came to it. It all started with a one page memo and an off-site dinner at some restaurant whose name I cannot recall in San Francisco.

So what Hogan Zeroes is is a politically incorrect sitcom that ran in the seventies about Americans in a German POW in World War two. And, of course, the Americans are smart and the Germans were dumb. And the gentleman who ran the camp, colonel Klink, was particularly dumb and vulnerable, where Hogan, the lead POW, was smart. And Hogan’s and Klink found themselves in front of a safe in Klink’s office that had been jerry rigged with a bomb. And if you turn the handle of the safe one way, the bomb would explode.

And if you turn it the other way, the safe would be open and there was money in the safe. And Hogan, the American, looked at Klink, the German, and said, Klink, which way for the handle? And Klink said left. And Hogan turned the right, and he opened the safe and they got some money. And Klink looks at Hogan and goes, how did you know? And Hogan said, I wasn’t sure whether I’d get it right, but I was positive that you would get it wrong. And that little vignette was what Mike Moritz and I used when we went into China.

In other words, we were absolutely sure that he and I would get it wrong. We didn’t know we were gonna recruit Neil Shen. We didn’t know we were gonna find someone who would get it absolutely right, but we liked the chances of an unknown person we had more than we liked the chances of him and me. And I brought up Hogan’s ear with him. I told him the same thing I told you, and he agreed. So we took a shot. We went looking for people, and we luckily and fortunately, and thank God, we came across Neil Shen.

Well, first of all, I should explain what Sequoia is. It’s a brand that is run by local people in local geos who make every important choice and decisions about investing, hiring, firing. That is the key. It’s finding the right people and by the way, in every line of business, whether it’s China, India, Southeast Asia, our hedge fund, a multifamily office called Heritage, we’ve had to go in and effect changes once. So it wasn’t that we got it so perfect from the beginning. So we had to go in aggressively and affect change.

But finding great people, going in if you have to, and then leaving them alone most of the time knowing that local people are the best suited. And then in my role, making sure we all roll the same way, we have one culture, we have centralized compliance, financial reporting. Those are secondary. My role is a secondary importance to the role of Roelof in The US, Shalender in India, Neil in China, Charlie Cow in our China hedge fund, Jeff Wang in our US hedge fund, and Keith Johnson Heritage.

The decisions, the important part of the business is there. But that’s what Sequoia is. It is a decentralized organization under the one umbrella brand.

Look, there are a number of people in the world that think that we, Sequoia investor, sit by the couch, we look at the clock, it’s 03:00, let me have a drink, it’s 03:30, let me put my net in, oh, here’s a fish. Nothing could be further from the truth. It is an every second, everyday thing. There is no such thing as a self fulfilling prophecy. We have gone as far as taking all the posters from our companies away from conference room once upon a time and say, let’s act like we’ve done nothing.

In fact, our success is the greatest danger we’ve had because it can confuse people that yesterday is tomorrow. Success has to do with yesterday, but tomorrow is the only thing that matters. And it’s always the next partnering opportunity with founders and success has little to do with it. No founder calls us and says, I’ve got a great investment. Hey, Sequoia, why don’t you partner with us? We only want you and so no. We’re always fighting like cats and dogs for every single opportunity with other venture firms, know, and so on.

So self fulfilling prophecy, I wish. If that were the case, I’d work forty hours, not eighty hours. It is a go, go, go compete, compete, compete business, and it’s gonna continue to do that. And anybody else that think they can relax, they will be quickly out of business.

We would like to have a 100% market share. We have been responsible somewhere around 6,500,000,000,000 of partnering opportunity, meaning the companies with which we partner have generated 6,500,000,000,000 of market cap, about a quarter of the NASDAQ, God knows how much of the NYSE and Hong Kong now, somewhere near three fifty and four hundred IPOs. But that’s all yesterday. That is all yesterday. We’ve done nothing tomorrow.

Think of all the great companies that you love in the public market, whether it is Square, or whether it is Google, or whether it is ServiceNow, pick any company. I will tell you that those companies always beat a threshold sales price that somebody had. In some conference room, somebody said two years earlier, when it gets to 40, we ought to sell and the company gets to 40 a year earlier and they probably sold. And I contend that is absolutely the wrong way because all those companies clearly overshot those thresholds.

In my mind, there’s only one can this company be five years from now? Get away from all the models. The models aren’t worth the paper. They’re written in past a year or two. And yes, you may want to have a model just to do some thought checking, a thought experiment. But the only question that to me matters is what can this company be five years from now? Let the dream gene go, not too much obviously, because not every company becomes a great company, but if you see a company with terrific competitive advantage, take Airbnb, I do not know the numbers, I do not want to mention this quarter, next quarter, this is not that kind of comment.

But I would say young people are traveling more and more on Airbnb, the hotel industry is dying, the question for me of Airbnb is not the demand, is the supply, is there going to be enough supply in years to come, Because that is probably the type of company you want to tuck under your pillow and not look at for five years. Because all the trends are in its favor. It’s a two sided marketplace, global, that if they can get enough supply, we know people of Europe.

Now, I’ve never stayed on Airbnb, but I supported the investment, but people of your generation, the Gen Z generation, they go Airbnb first. And so that’s how we think. What can this company become in the next five years? And what is the key question you have to answer?

Sure.

Well, when you say favorite in this summer, it implies a new book. My two favorite books that made me, that helped make me as a human being. It started with The Fountainhead when I was a confused young man, and it continued with a book called Anti Fragile by, I believe, Nassim Tlaib of how to make sure you stay as tough as nails as you go through life. So both those books were formative books, and I’d like to think I eventually became. Now, whether I became that or not remains to be seen, I give those two books a great deal of credit for helping me be who I am.

First of all, it’s important that as you get older, you shrink. And I would advise everybody as you get older, lighten the weights, increase the reps, and don’t worry about size. I’ve shrunk from an extra large to a medium. I worry about staying healthy, not in pain and longevity right now, not macho size, which I might have done in my 40s. But my workout routine for every body part, just once a week, I live two hours for one day, two hours another. I hit every body part a whole bunch of times, at least five days.

I usually do cardio three to four days, and I stretch every time I exercise. And so it is stretching, it is cardio, it is lifting lighter than before, it is eating right, which isn’t to say to eat perfect, but to limit your intake of sugar and booze, yes, you got to live, yes, you got to drink a margarita, a beer, a glass of wine, a bourbon, but don’t do it too extreme. Have a life. Enjoy life. If you’re gonna die a year too earlier, so what?

I’ve seen people at 86, 88, 92. Two years less is okay as long as they can have a fun time throughout the whole ride. What do you think your biggest strength and your biggest weakness is, Doug? Somebody said to me about a month ago, a topic that I had never thought of. They told me my greatest strength is empathy. I have an interest and an ability to put myself in another person’s shoes. So for example, I get really irritated when somebody at Sequoia does not clean their plate and puts it in a dishwasher with crust.

Why should somebody that feeds us lunch clean our plate? We all have to be treated with respect and empathy and so on. So I think empathy with founders, what are they going through? How do we help them? How did not stress the situation even more? That is my strength. My weakness, I am not proud to say is insecurity, wanting to look smarter or better than I am. It goes back to the abuse I received in my high school days. I still want to show those son of a guns what I’ve become and so on.

That unfortunately, those random thoughts still flow through my head and I wish they finally freaking stop, but I don’t think they ever will.

I think at the age of 64, I’d call them a character weakness.

Oh, it’s dealing with the people, the personalities. Everyone has their own needs. COVID has added a whole bunch of stress. The people who are outside of the investment team don’t feel as close to the investment team, rightfully so, by the way. They’re not wrong. It’s just all the people issues. That’s the toughest things. Especially if I have empathy, I feel the individual pain for all these people. And I tried my best to ameliorate every situation, which again, may be a character fault. But that is really the toughest people.

I love them. At the same time, that’s probably the toughest part of my business.

Boy, three traits, I can think a whole bunch. First of all, I’d say love. You’ve got to have a love for your family, love for your friends, love for life. I think if you’re negative, it almost doesn’t matter what else you do. You affect everybody else in a negative way. The second, would say reality. A lot of people live in a world that is not real. Can we have free this? Well, there’s nothing’s free. Someone who pays for a thing, things through. Don’t listen to these one liners to what people say that sound good that are meant to bait you.

When you hear something that’s too good, it’s probably someone saying for their own advantage. So reality, stay real. And if I were gonna pick for third would be courage. Go try and do something. It doesn’t mean you’ve gotta be perfect every day. It doesn’t mean you gotta go a 100% every day. Look, I see it in sports. The players don’t bring their best every single game. It’s impossible. But they bring their best during playoff time, championship time, during the games that matter. So bring it every day and really, really, really, really bring it when it matters.

I mean, if you held me down to three, those might be the three that I would choose.

Well, I know that things go up and down, and I know things cannot always go up into the right. Now, in some cases, it may have held me back the last few years. We are in, like I said, in year 14. But boy, it always causes you to ask what if. And so one of the exercises I’ve asked, we run more than once at Sequoia. Let’s take a fund two cycles ago where the companies are just coming up. How would we feel about those investments if the market just crashed by 30%?

Let’s figure out how many of those were momentum driven and how many of those are really quality companies. And so boom and bust inject a sense of fear to balance a sense of greed, a sense of reality, and it just grounds you. And it gives you the experience and the strength to overcome the next bust that we absolutely know is coming. I can guarantee that.

It’s very easy. I love to eliminate the irrational competitors. And notice I said irrational competitors. I didn’t say eliminate the quality companies that fight for us in in companies. I’d like to eliminate the ones that come over the top and say, I would do every Series B you have at a billion pre. And why would I do that? It’s because it sends the wrong message. It’s not even for competitive reasons for It’s because it sends a negative message to founders. What founders need is a true feedback type of system.

If you build a great product, customers will buy it, valuation will increase, people are going be interested. But what do you do with founders that build a crappy product, nobody’s buying it, and somebody’s willing to invest at a billion pre just because us or somebody else is in the cap table. And so I would eliminate irrational competitors that always show up with investment cycles. Like I said, the investors of yesteryears recall ICG and CMGI, Go look them up in 2000.

Well, on a personal basis or a professional basis? Both? Both, yeah. So on a personal basis, I’m lucky enough to have four children, seven grandchildren, all in the Bay Area. I’m happiest when I’m hanging out with them. Last night, I went over to our daughter’s house, she has a brand new child, I made gnocchi with pesto Caesar salad, I watched everybody munch, margarita or glass of wine, everybody was happy. That’s personal. On a professional basis, I’m happy two times. When I immediately help somebody win a competitive deal, it’s the old sales Doug from the old days.

And when I’ve gone for a long term ride at David Vlez, not now, maybe three years from now, when we come through the other side and I was there watching them grow, watching them build a great business, like to think I’ve helped during key times. Seeing that whole journey, having a glass of wine or something with David talking about all the times, that deep friendship that has been built, that is the other time from a professional sense.

You are too kind. Thank you for the very kind word. It’s been an honor to be here with you. I was looking forward to it, and stay healthy and do well.