#47 — Alfred Lin — Investing In Greatness
Below the Line with James Beshara

Full episode transcript -


below, friends and listeners below the line. At least, today's episode is brought to you by a little project of mine called Magic. Mind the world's first productivity drink. Want more creativity, more flow, more energy and less stress. Go to Magic mind dot Co. To get the two ounce shot that contains 12 magical ingredients that are scientifically designed to improve your productivity. Along with CEO's doctors, musicians, even Navy seals. I take it every morning and have been for about six years after a trip to the your from drinking too much coffee day today. And it is the single most important part of my morning ritual to doom or and stress less. Listeners know that I go to pretty extreme lengths to talk about the science behind sleep diet, exercise alternatives to coffee stress management.

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really appreciate. So thank you. Hello, friends and listeners. Today's episode is with one of the world's best venture investors, coming from perhaps the best venture firm in the world as well. My guest is Alfred Land, who's a partner at the famed venture capital firm Sequoia Capital. Alfred is an investor and companies like Airbnb door dash and insta cart, among others. His track record as an investor is impressive, but as an operator, building companies like Link Exchange sold Microsoft his own venture firm years ago that invest in winners like Open Table and then Zappos selling to Amazon. It's it's clear that his track record as a builder is just as impressive as is as an investor. So as you can imagine, Alfred has a lot of insights from uniquely being at such high levels on both sides of the table.

We talk about how he spots great founders, what the process at Sequoia is really like peeking behind the veil of four of the most perhaps the most prestigious investment firm in the world. We talk about the books that have impacted is thinking as an investor. It's not what you would expect, and we talk about the silver lining of this new world will find ourselves in. We also spend a little bit of time about talking about the stories that have shaped who he has become, things that you probably couldn't read anywhere but are the things that he thinks a lot about All that and more with one of the smartest but also one of the kind of people in Silicon Valley. This is below the line. A right, Alfred. Cheers, sir. Digital remote. Cheers.


Hello. How


are you? I'm great. I'm great. Thank you so much for I've been anticipating this episode for several weeks now. I'm really excited to get a chance to chat with you. We've known each other for maybe 88 or so years. But it is, um I have a feeling this conversation will be deeper than than anyone we've had in in the past. But it will also be on a topic that I know that you think a lot about and around creator psychology and just the the journey that happens in between the ears as a creator, as a maker, you actually have one of the most interesting backgrounds of guests that we've had on because you are a creator, maker and an investor. And you, Bennett Sequoia now for about 10 years. And I want to get into all of just the rich history that you have in your, you know, creator investor biography. But 1st 1 and started. What is it like right now running a VC firm remotely digitally with with everything that's happening with Cove it and and still operating with Sequoia?


Well, first of all, thank you for having me on the show and thank you for your friendship in our relationship. But it's been always been fun to talk to you. And I'm glad that you're doing this podcast. You're writing a book of us creator psychology, and I'm happy to contribute. I think in terms of running, we call us running anything. I think we are trying to do the best we can, trying to still help our founders. First of all found help our founders an advocate, this crazy environment, I think for the founders that we have established a relationship with. It's not that different than calling them, said an attack. Seeing them over video.

There are certain things that will be better in person, but way have adjusted quite well, too, being in this post covert world and being locked down and doing everything over a zoom, I think making new investments there are pluses and minuses. I don't have to travel as much not flying to New York to meet an entrepreneur or going to a board meeting. So I get a lot of time back, and I think there are things that are just more efficient, done over over Zoom and and Zim. The company and Eric you want has proven that you can do a lot over Zoom when they went public themselves, and did all of the road shows over assume as opposed to in person. It has challenge least centers like our services are also sort of challenging our psychology of just trying to do as much as we can over Zoom


is and your your partner, Rohloff was just speaking about I think you re tweeted. It was talking about how Kobe is. The silver lining is that it's accelerating. Ah, lot of, um, I think he turned it, Ah, adoption cycles. Do you mind telling and you retweeted it and added some commentary. Do you mind telling listeners about that thought and what he meant by that?


Yeah, I think the one thing that we sometimes fine is that a company comes up with a new idea and it takes a lot of There's a lot of frictions and change consumer behavior. It takes time because people are set in their ways. And what what has happened now is that we have basically been shelter in place and that causes us toe, have to do a lot of things online, challenging some of the things that we believe to be true. I have to have this sort of meeting in person. I have toe sort of look someone in the eye and and and judge their body language to really get a sense of them. And now that you can't certain things have to be done differently. And I think the that there are a few set of things that we have come to understand that we don't have to do it in person. I think there are certain things that are better over online getting groceries delivered on. We are investors and instead carted were investors and Jordan Ash. Getting some of this stuff delivered is, is a good thing. More people shopping on Amazon has been has been good and you don't have to go into credit stores and the experience there said there are a set of experiences that are better online. It doesn't mean all experiences air better online. I still prefer to go into a restaurant when restaurants over and then get the dining experience,

and there are certain things where I do want to touch the fabric before I buy it or try things on. So I don't think the offline world will go away in real life, will not go away, but it challenges there are thinking about some of the things that we really have to do in person versus online. And so adoption cycles for things that are purely online is getting accelerated because we're hearing about them where, uh, and we're feeling how much more efficient certain things can be. My son is basically learning online now, and there are certain things were like that. He Cookie himself consciously sort of acknowledges trying to do group projects together over over resume is not as efficient as from being able to serve working, collaborative collaborate in person than there are. We all know that Children learn better in person. It's sort of in small groups and in person and collaborating in their own way because that they learn from each other, not just from the teacher or the classroom. If it was just purely the teacher of the classroom, you could teach that and lecture style.

You could teach that all over, Ah, online education. And then I do think that, for example, we will not travel us much. I joked that all non essential. The fact that companies were canceling non essential travel seems a little silly because they should have never been on us. I think my outer like, Why don't why my pay for for these travel expenses. I shouldn't have Teoh. They should Onley have essential travel. And now that we have cut all travel, you realize their whole bunch of things that seem non essential. And we won't go back to the world that we had before completely and will be better for it.


You one of the threads in which we have gotten to know each other's through, um, Airbnb acquiring my company and and you're on the board Airbnb e. I know that much of this is private and it can't be shared. But what can you share about this sentiment for? You know exactly what you're just saying. Travel might be different for a long time, but they're the obvious notions. And where that that hurts Airbnb, what are some of this sentiments that you've heard or you personally feel that make make? It may be a exciting opportunity for a business in the travel space right now And maybe Airbnb specifically or just being able Thio Thio Ah, potentially maximize the change in trends that will come after you know Im Cove it.


I'm sure I probably just start with how great Airbnb is as a company. But all of that has to do what? The founders in the founding team and Brian Joe Nate coming together in this time of prices. And you know that there were the darling company of 2020 expecting to go public, and now they're they're hit with a pandemic, and they're probably hit the hardest because travel shut down. I don't know how many countries around the world, probably all of them have travel restrictions of some sort. So international travel shut. We, as human beings, love to explore and love to travel. And I don't think travel will be gone forever. And people are gonna find different ways of traveling. Even some of my partners have decided to rent an Airbnb a little bit away from San Francisco s so they can shelter in place in a nicer setting so that they could go out for a run more easily, um, or enjoy the George Tahoe,

for example. My brother has on my mom has decided to the shelter in place in Florida, and many of my friends who live in New York and chose their apartments for approximately the work or they don't spend a lot of time in their apartments have decided to serve shelter slightly outside of New York City. And many, many of those sort of things that Air BB is joining this first transition from short servicer of short term sort of vacation runts. Rental trips to longer term stays. Because people want to shelter in place in slightly different areas and give that I can work from home and my kids are learning online. I can probably do that almost anywhere I have course, have decided to just stay in San Francisco and support San Francisco, and it's locked down, but you get my point. And then the urban use trunk has tried to get experiences, local experiences and have had a fair number of successful experiences in person and in different geography ease. And they've migrated some of those into online experiences, and one of the things that has, like,

surprised me to the upside. And the silver lining here is during a crisis. There are people who rise to the occasion, and you find that people have pivoted already from. I know that I'm not going to get the summer rentals, the short term summer rentals in Napa, but I can rent this place out for a month to someone who wants to shelter in place. My place as the host have been extremely entrepreneurial on Airbnb and the experiences hosts have been similarly been extremely entrepreneurial. And, you know, Brian was telling me about this, uh, restaurant tour that used to be a bodybuilder that became a drag. Um, service became a drag queen and performed in in his restaurant. And then the then decided that,

well, my restaurant shut down. So I'm going to going to sort of host sangria tastings with my drag friends and have a great party every single night and entertain people through through video. Just like wow sent me the link I want. I want toe experience. This too. And the, you know, sort of people are creative on day, find their audience, and, you know, so whatever we're going through and you know, this is not fun to go through, I find comfort that people find different ways to express themselves in different ways to be successful in different ways, to find success,

whatever it means to them, and pivot and become a better form of themselves with since your Churchill eyes famously known, saying, Never waste the crisis. I also just think that if I had to refine that, it's about never wasting a crisis to connect with the people that you love. The people that you care about, the people you want Teoh develop deeper connections with I mean, when when Churchill said that he was saying that to his constituency, he was in effect deepening his connection as a leader to his people, and I thought that that was a fairly powerful line in business. But then over time I've learned that he was actually talking to his citizens, his British citizens and trying to get a deeper connection to them. And we see that in this crisis that people are developing deeper relationships with the people that they care about with the business, with the people that support their businesses, with the people that support their art. And where's that they probably could not have imagined before the crisis,


right? Yeah, that's that's an interesting distinction of the of the Churchill quote of. It's usually termed in terms of kind of in a situation of how to be you on the offensive, be aggressive. It kind of in the dynamic of taking, taking a position audio against your opponents of never wasted crisis. We can we can advance our our mission. And But I think that's an interesting perspective or dynamic that he's saying it to his own constituency because I think it's that is one of the most powerful things about a crisis. Is it shakes you from shakes you from maybe, ah, hypnotic mind, state of caring about things that don't matter. And it actually like this, Like this crisis were in. I don't know anyone that hasn't had, um they're kind of sites turned inward towards their family towards their home.

I mean, everybody is is kind of sanctuary if eyeing their home. Everybody is talking about how much time they're spending with the family, talking about how exactly what you're saying about how they could do so much of the work from home, how they don't need to travel for work. It's actually yeah, the silver lining seems to be refining or reemphasizing what, what has always mattered to us rather than showing us something something brand new, the and I found it so interesting on the every and the experiences side that experiences that you chatter about the that you mentioned about the drag queen. What were they drinking, Nemesis


or ah, is the sangria


tastes and great tasting? Yeah, that's that's just you can do that over zoom or over video, uh, and get to know people around the world. I was in a ah book club recently, and it was a book club zoom, and it was Someone is like, Hey, I'm Jay. I'm in Ah, Mumbai And someone's like, Hey, I'm Todd. I'm in Florida and it was just It was actually crazy How It didn't even faze me that there are people. I was in San Francisco just in a room with, ah virtual room with 12 people from everywhere from India to Florida to Puerto Rico.

And it was cool that it didn't faze me. It was even cooler than I realized. Everyone's just announcing where they're from, and it's not phasing anyone that we're all chatting together around the world in this digital book club. There is a lot of a lot of things that that are in essential for us to form those deeper connections and this kind of highlighting that that's very cool. What is in terms of, um you mentioned Churchill and and the application of his quote to business. You and I have chatted about the deeper lessons you've taken from different thinkers, leaders, different business people. We chatted about a book that you really love man's search for meaning and its application Teoh to just our own journeys. Do you mind telling listeners a little bit about, ah, what the Bookman search for meaning isn't and why? That's one of one of the books that you mentioned to two founders and creators as a great read.


Well, that's Mansour's from meaning was recommended by my partner rule off on Dumb. And I read it again. I think I read it earlier in my life. Didn't quite touch me the same way a Zai read it the second time when, well off recommended to me. And it's about ah person, that 13 pretty horrific stuff. He was, um, he had Teoh. He he was loved up in a concentration camp and had to survive the concentration camp that what got him through was this desire Teoh get to the other side of it. Horrific situation and to you don't with his family um, and that, you know, kept him going. But during that time,

I think he sort of refined what is important in life and his writings, whereabouts, the title of the book, Our Search for Meaning and No, My Favorite line of that book and It's It's a fast read. And I think it's one of those res where you read it one time and you don't quite it is touching and all that. You don't quite grasp it. Read a second time you like, start highlighting certain lines in it and run, and then the third time you start remembering it. And e think the thing that, um, about reading and learning about exceptional people from all walks of life, whether in this situation is a doctor or a politician, like with some church jewel Orly, your favorite sports person.

Maybe Kobe Bryants, where your favorite entrepreneur and learning from them is that exceptional people sure, certain things that we can all learn from, and they have life lessons that we can all learn from. We don't have to start from scratch and in in man's search for meaning. The quote that I remember most is those who have a wide to live can bear with almost any happy Um, and this is coming from a person that had to experience Harbor, fix a horrific situations of living through a concentration camp, and it puts things in perspective. I like we are dealing with a health crisis. This is horrible in some ways, but we're not going. We're not living through that. We're not going, you know? And one,

you know Doug Leoni said, Yeah, this is bad on I'm not trying to make light of it. But, you know, my father's generation had to go to war for World War A war to it, So it SSM It does put things in perspective when you read about people in their lives, especially people who have. We've gone through frankly, worse things and and the quote that I just talked about, those who have a why to live can bear almost anyhow, I think that's been sort of used now in business. We would talk about making sure our businesses have a why have a mission, and it's ironic. It takes so long for us to realize that and so part of trying to learn lessons from obsessional people and applying it differently is you can learn you could just study all great business people and you will learn the business lessons. But some sometimes learning from people from a different walk of life.

There are lessons. Could be justice, ethical to you of business. And that's an example that probably in the last 10 years is what were the sort of you know, start with why statement came about on. Yet this book was written a lot longer than 10 years


ago, right, right? Yeah, the one I want to go deeper on that. But I also want to I want to back up and ask about you. Ah, and and the question that I that I ask. I guess there's two questions that I always touch on with guests, and one of them is. Can you share three stories that have helped shape who you have become either professionally, personally, but three stories in your life that have helped shape who you've become? And then I think we'll touch back on the philosophical Ah, deeper side of business here in in a few minutes. But what are three stories that have helped shape who Alfred Lin has become professionally or personally.


Wow, that's a powerful question. I've never been asked that question. It's a really good question. Um, maybe I'll go back in time and, um, and just tell you a little bit about myself in terms of I was born in Taiwan and my father worked for an international bank and he was traveling all the time to set up this operation or that operation he worked into the He was one of the early people who studied computer science and was trying to implement computer programs to do accounting. And so, um, nothing. When I was three or so, I was told what my dad told me that he was leaving for an extended trip and I started crying. And he's like, Look, after this is just temporary. It's painful,

but it's temporary. We'll see each other again and remember that it was painful. It is just just no, that's important. People in your life may come and go. I don't think happened to my dad, by the way, just like look at that time at the age of like three or four, your father, leaving for a few months is almost like then leaving forever because you have no concept time and that that was that really rocks my world. And a few years later, we he started working in New York. So we moved to New York and had to relearn everything because I just learned English, etcetera. And so being an immigrants and seeing my father's branch out and do things that probably no other person in this generation would do gave me a level of wonder lust seeing what's possible. He was,

but he was still very conservative person from a maybe financial investments or career perspective. But he was learning computer signs back then. He was implementing that in a bank. He was trying to take a bank and talk one and making an international. So relatives of his generation he had a fair amount of risk seeking behavior or business. And I think I learned that from him,


and that is fasting. I think it's I think it is. It's really helpful. My I remember my oldest is really helpful for the prior generations to help push the envelope, but not just as a model, an example, but it. It also allows you to push it even further and and I remember I've got three older brothers and the oldest brother, my oldest brother, Adam Him going to New York to we grew up in Texas for for undergrad was so it seems so far. Seems so crazy. I remember my parents like, you don't need to go there. You can go to school out here. And but him doing that then allowed me to go. It was a cakewalk for me to go to the East Coast for school. And then,

um and I took it a little bit further by moving to South Africa after graduation in that was it. It was kind of the same conversation. Why do you need to go there? And but it was It was really helpful that he had helped blaze the trail. And my dad had also moved around for for his, you know, personal professional pursuits that it made it kind of the norm that you go out of the out of your comfort zone, go where people are, might be a little bit more unwilling to go to create opportunity. That's a that's a big move from Taiwan to to New York, and I'm not surprised that it helps set the foundation for you to take some risk.


Yeah, And then, you know, it's in your story about your parents and many of our stories like these air about, you know, our parents. The second story would have is about my mom who, like, set the foundation of she sets high standards. My mom, if you compare my month and my dad, I think my dad worked hard and has a lot of great, um, both chuckling. Just gonna compare contrast. And I love both my parents, but,

you know, But my mom is Yeah, I would just say has probably more i q points than my dad. Not that that's not smart, but my mom was exceptional and she was the number one in her class. She graduated number, wanted her class everywhere she wants. She would gen incredible memory. And she was the fastest rising VP in her bank. In a world where, you know, at that time you just didn't see women as a VP and a bank. And she also worked in turn one. But then when she came to the US, she's decided like, Well, I want my kids to be exceptional and she just She is a She just said high standards, and my brother and I would always complain. She's just she's exceptional and hard to get along And


it seems to have worked with what you what you accomplished it seems to have had, um, seems like a net positive impact


totaling that positive impact. And, um, you know, I think that that is, that has shaped who I am. I have high standards for myself, and and I never questioned whether, even though my mom had high standards, never questioned how much she loved me, and I love her for two. I wouldn't be the person who I am today without her pushing so hard to try to reach for the next level. And, you know, the thing that she did that I'm not sure many parents are willing to do is she was willing to do the hard work she would always She would read one chapter ahead over two chapters ahead and for my classes, and to make sure that I understood every single concept, she had high standards.

And if you know that's the typical Asian pump, it's Asians. Your apparent thing. What happened if you came home with a 98. What happens today up the two points kind of thing. But it wasn't about it wasn't about the points it was for her. It was more about Did you really understand it? She cared less about the test and more about true understanding, and she didn't. She just didn't accept me like remembering the answer. She wanted to know if you could derive the answer, which led me to sort of think about things and, you know, back to sort of some of the things that we were talking about. Like sometimes you want to be able to do the hard work and to get to the source truth. And I think I'm learning that from my mom.

She's just never accepted. Oh, here is the answer, or here's a shortcut or here's the tweets or here is the short form. Fine. Use that as a summary to start, as as the high level summary. But if you really want to get to know something, you want to go extremely deep and be willing to do that, and the third story is a little bit, so it's part of growing up like we rely on our parents for a lot of things and, you know, typical Asian parents. I wanted me to be a to be a professor because you contribute to the world's knowledge, if you can. If you're actually smart enough Teoh to get a PhD and and to do that it If you can't do that,

then you can be a doctor and help your people of any diseases and give back to society. That way, if you can't do that will be good. Become a lawyer and be a lawyer enough for a corporation but to fight for justice. And if you can't do that, then become an engineer and build stuff.


Is it kind of in that in that order, was it kind of in that order for your family?


It was It wasn't that order for my family and and, you know, all the way at the bottom was to become anything related to business and obviously ended up in business.


Uh, I, you know, I will say, When we first met, I was like, This guy's not smart enough to be a professor. As smart as you were, Alfred, I was like no businesses is the only wrong of the Latin Know that that is so interesting that that's kind of the the last wrong. Is it? Was it maybe from this? Why is that just to pursue that a little bit? Is it from the social side of just not that perceived? Is that impactful to society?


I think there is a bit of Confucius teaching. Or, you know, in the in Chinese culture, the smartest people became civil servants because it was hard. And the system that's different, right? The smartest people, we're the ones that got educated in a world where not everybody got educated and you got free, right? You got free scholarships because of how well you tested or how well how smart you were and the the country would would subsidize your education. And then you will become a sin monster. You become civil servant, and part of the civil sermons served was to get back and teach i e the so the to finish the story. I you know, the sort of painful thing of growing up is to tell my parents. Hey,

I'm not dropped out of a few street program. We're not gonna complete that. And they were very, very disappointed and upset with me for some periods home. But at some point, you have to strike out and many of the things you can talk about Confucius is one of the sort of philosophers that you should study two. But one of the things that about growing up is like, yes, you go deep and you learn and you read about all these exceptional people. But at some point, you have to strike out and be your own person,


huh? Yeah, is that It's certainly a muscle that it is. If you can really tone that muscle of being able to go out on your own and not have toe outsource, you're thinking of what others want. One of you. It certainly is. It's powerful for creating obviously new businesses, but also just thinking definitely for yourself. And it's it's one that I think, even as risk is, my career path has been a moving different places. Starting businesses. It stills was a muscle that kind of that independent journey that it took a long time. Teoh gear up for to make little tiny investments in side hustles before they become main hustles and things like that your entrepreneurial journey is in that independent thinking. This might not have been a business that you that you told your parents about, but,

um, I remember reading that the way that you got to know Tony Shea, Um, who you would end up starting a few businesses with. And ultimately Zappos was Do I get the story right where you he was that he had a pizza shop or a pizza stand and and you were buying the pizzas like arbitrage and then selling them piece by piece. Is that Is that correct?


The stories always get, you know, as


you know what? Yes. Yeah. What's the rial? One


stories get crafted in ways that are hard Teoh on craft and, you know, it becomes a legendary straight. But the truth of the matter is, Tony, I'll tell the full story, which is, like, also fascinating. Is there a creek employed in a and, ah sort of journey standpoint and people that back to, like entrepreneurs air just like crafty and creative? So, in our college storm, um, there was a grill. It's it was not that successful in terms of like those popular,

but just I didn't I don't think it like, made a ton of money we're not talking about. Yeah, like any amount of money, Let's just say you know most people who ran the girl one. It's a break even at the end of the year. So this Quincy house at Harvard every year the seniors would auction off the rights to the grill to the next up and coming seniors. And, you know, the money that you made was how much people are willing to pay for the girl because he basically broke. Even the whole year is so, like the art. That was the play. You put a little bit of money toe work. You really didn't make any money because you running a break even in part of the reason it ran and break the them was it made hamburgers, shakes and fries.

And, um, there's only so margin so so much margin. Tony decided that pizza was actually ah, higher margin, um, food, because she's a subsidized by the the US Dairy farmers. Oh, are the country. I don't know who subsidizes the cost of Jerry anymore, but but so he was just like So you got your gonna win the rights of the grill and you're gonna invest in the pizza of them to do this. And so I was like, Yeah, and and it was like, Well, how's that gonna work you?


And were you friends at this point? Or acquaintances? The Georgia Georgia


isn't, you know, not not deep friends with work lenses. And and we live in the same dorm. So we see each other and eso he decides that he's going to not bid on it for one year. But he's gonna as a rising junior. He's going to bid on it and owned the rights to the girl for two years. Because then he can advertise the cots of the pizza oven over two years instead of one year. Like interesting. No is like interesting, very smart, like creative and like, That's this is the side of creativity that I think not. It's not like it's not like genius level creativity, but is genius level in the sense that hey, no, why didn't nobody else think of this?

It's like Han obvious that if you had, if you around the grill for two years, you could invest in it and make it a better experience. So he put he he put up some TVs and film some V eight. The baton done. It was probably BHS takes, um where he could recorded, um movies and play those movies in the grill. So it was ah, nicer place to hang out. He invested in a few chairs along with the pizza oven. You know how he won the bid? How was knowing that he was the only person who was an up and coming junior that was gonna own the rights of the girl for two years? He knew that he could have been anyone, so he said high it hit the way he submitted his bid was highest bid plus $1. Ah, another creative idea.


That Z Yeah, you mentioned it. Maybe not genius level. Although there there, it's approaching that. I think it's your creativity is imagination times, courage and having the courage to then just not only have the ideas, but then also say Okay, I'm gonna outbid everybody, and I'm going to get the P. I mean, investing on the chairs and TV is it's really fascinating to hear these little micro decisions that that ah, ultimately you predate what becomes Thea founders Apus. That's really cool.


Yeah, that sequoia. We look for founders that have clarity, conviction, encouraged and creativity. And he has that in spades across the board on this particular idea and then future. Same same situation with link exchange and legs apus, but that getting back the story so he wins the rights to the grill. He puts him these pizza ovens. He makes it a fun place toe hang out and we become fast friends talking about all of this. And you know, he one of the other ways as you if you need a cash flow because he had just invested in all these things and so he wanted to give a discount to people who would get a membership house. And I don't large color from the group. So it negotiated with him on. Sure, I'm happy to pre pay, and I'm happy toe by pizza pies of pizza every single night,

and I just wanted to bring it upstairs on and give it to my roommates. I didn't really sell it to anybody else. It was just my roommates, and I just wanted my money back. So the slices for dollars a slice downstairs, but maybe it being more now. And I got a discount. So it was a dollar 75 for a dollar 50. I always got $2 I was trying to give the money back, and they would. My my college roommates would just say No, because I don't want to give you quarters. Well, my really like you rather just I mean, we're poor college students. So,

like what? What? What's so like? Interesting. About 1/4. Well, it turns out, obviously, if you think about it 1/4 bath, a need for washing machines, drawing machines, vending machines, quarters were priced commodity. And you have to go to the bank to get rolls of quarters just to do some of these things. And people didn't want to make the extra trip. And so it's one of these lessons about,

you know, arbitrage. You know, if you think about things as commodities, you'll never think of it any other way. But quarter should be a commodity, and yet it's not. And I think companies that succeed realize that you condone, say what they're selling is not that interesting, etcetera, etcetera, but they make it interesting. There's a story behind what their products to secede versus their competitors because they're selling value. Um, and the value ours selling was bringing pizza upstairs and selling it by the slice and people not wanting to part with their quarters. So a few years later,

not for use a few months later of doing this Tony finds out that I've been doing this and simple calculations have suggested that I make more of her our than he does because of how much he had to invest the fact that some people try toe there's stuff behind the cash register, There's leakage there, spoilage and all that kind of stuff. And all I do is come downstairs, goto the grill and bring up the pizza. And that doesn't take a lot


So adored hat door, dash versus the restaurant.


Yeah, and we become fast friends just through this experience, and I graduated your earlier came out to stand for for my PhD program that I dropped out of. And my parents are still asking me when I'm gonna finish that. Uh, but, uh, yeah, and I still think it's funny on and they don't, um, but what? I came on campus at Stanford. Tony wanted to bring subways onto campus, and there was no commercial operations about them. It's not like today there's Cookbook Cafe at Stanford. Oh, it wouldn't they wouldn't let any commercial operations.

And so Johnny's always been someone who was like, just pushing the envelope, thinking out of the box. It's not that creative. So if you think about is not back created, why does this university want to run? All of these food services, like some of them, could be better on by others if they wanted. Teoh and Stanford would. Well, I completely reject the idea of honey subways on their campus that even though there was, they would just say, There's a subways on University Avenue that people have to get off out of their door and go travel down to University Avenue, which is a truck, and we are all lazy and don't want to make that trip.

But they refused to you. That's a Tony have to find something else to do. And then he started Link Exchange, which square funded and back to what's acquits and Sequoia enlisted. I think $2.75 million for in the company and in 17 months, that company I was sold to Microsoft for $265 billion. Sounds like a great outcome. I think we learned a lot from that experience of what to do and what not to do.


Sounds like a phenomenal, phenomenal welcome. What why do you say? Sounds like a good outcome if, as if there's a contrast ing story there.


Well, I think financially is a great outcome. And back then it was the third largest acquisition by Microsoft had down. And so I'm not. I'm not saying that it wasn't good financially. Sequoia made AH affair very good return in a short period of time. Our employees were quite happy. But I do think that that company had a good why, until we let the culture decline. And it's one of those things where we we learned to get religion around culture and making sure everybody understands why the company everybody buys into the culture. The idea is that now we talk about ATS apus we learned through the mystics of like exchange.


Do you mind giving giving a few examples of what you mean?


We didn't interview people for culture fit? We didn't. I don't think everybody who who joined or on the same mission we hired people who did the job functionally but wasn't didn't buy into the the mission of the company. They were more mercenary than they were missionaries.


And what what goes through? Founders minds Teoh you? It sounds like it first blush that you it's obvious mistake and no one should make the mistake. But what was going through your minds toe where you did allow the those decisions toe happen?


Heart of it? Part of it was not knowing. It's not that we let these things happen, and but, by the way, was a notable yes, it was noble, but we didn't have the experience to know that we were letting. We're making this mistake and sometimes you hired people and they look good on paper and they do their job well. But they're just not on your mission. And you spot that a little too late. I think when you interview specifically for a mission that you start tuning for that. But if you never turn for that, you're not gonna pick that up. How are you supposed to know that you should figure out whether someone really wants to build the largest banner advertising strange on the planet, and they're really into it. Or,

they see, is an opportunity to join a high growth, so quiet back company where they potentially could make some get paid while, um, through equity Onda take a risk and you just sometimes you don't know. And one of the things that I have come to learn is that I don't think people change was, um, with over time. But I think this more senior someone is, the better they are at telling you a good story. And so interview him. Senior people is harder than interviewing people who are starting their career because the people who strung out in their career they don't know how to be anything else. But their offense excels.


Interesting. I've never I've never I've never heard that, but that makes total sense that it's you in the beginning, You Maybe you haven't even interviewed anyone, so you don't know what a great interview sounds like. Or maybe it's 234 people. But as you become more senior, you could easily just jot down notes. Oh, that meal out of 100 interviews. This these were the really strong winds. Let me mimic that. You know, my next interview?


Yeah. And so And it gets much, much harder to interview more senior folks. And when we hard, more senior folks, they were there. They were on a mission. There were not on the mission. There were more mercenary, and it's not Look at what we're We're in business, so it's not. We're not trying to run a nonprofit. We need a balance of people who are both, uh, mission focus and and understand that we're building a business so I don't have a problem with capitalists. Do you have a problem with people who just see your company as a black box for generating profits? That's not the purpose.

If if you if you want it, that's then you just invest in a bond or investment company. That's what generates the prints money and you're happy shareholder, and you could be a passage shareholder. That's not what you do when you're ah founder or part of the management team. It's not what you do when you invest. Invent it. For us. It's a quiz. As venture capitalists, some people might see their jobs is investing load that's or buying low and selling high. We never think about our job and support as an investor. We think about our jobs as being business partners to the founders that back because we're also on that mission and we we're on our mission. We believe in the mission of entrepreneurship. We also believe in the mission of break causes. And the money that comes from,

um, Sequoia comes from LP's that are foundations, institutions, charity. So when we do good work with our founders, it benefits the university that's providing free tuition force. Junaid benefits people who are doing research that air trying Teoh find a vaccine for covert or for something else or for HIV. It benefits organizations that are trying to fight hunger and social justice, like the Ford Foundation. So But they when we look for this, is the reason why when we look for founders, we look for people with high conviction about how broken the world is and why they want to go fix the world. They have high conviction because they think thought about the problem. They've experienced the pain and they want to go correct it on, and you know that They're also very clear about why this this world is broken because they thought about it. And they've asked why 15 times and they've not gone a satisfactory answer.

And they're thoughtful about their creative a brochure not trying to attack everything related into that industry. They're finding a wedge that is, that hasn't been attacked before. And there's no reason why hasn't been attacked before. And if you think about some the successful founders, they look at it industry and they're like, Well, this industry's kind of built on a set of assumptions. Let's say there are 100 assumptions there only attacking five out of the 100 like a small percentage of the assumptions on yet that's their way in to go destruct. That industry onda we we just love founders that have clarity and conviction and courage to go do that and also the creativity to find that that that small wedge in that ends up being constructive


is there. And yes, I love I was actually just gonna ask, do you What is an example of a founder where maybe you went to the meeting and you're like, I don't know what insight this these founders are gonna have and and then left feeling like Holy shit that I had never thought about, how broken this was or that was. And that's a really interesting narrow edge of the wedge and Airbnb or or maybe one lesser known what's an example where you kind of had that? That feeling maybe even in the first meeting. Whoa! They have some insight, and there's a really interesting marriage of the wedge.


Yeah, I think if you sort of summarize the founding stories of these companies, they'll sound great. But it comes down. So like this unique insight that someone house and I've noticed that in consumer businesses, someone else's feature is another person's buck. What do you mean by that? I mean, like, Airbnb is case. The feature of hotels is, ah, standard room. Every room feels the same. It's not, you know, So you know what to expect.

And for Brian Chesky, that's just the bug. You're not living authentically in a house that is of a neighborhood in that city, etcetera, etcetera. And the same is true was when I met uh, Tony Zoo at Ah, Jordan. Ash. The bug was that, you know, why is it that the only companies that are skill can afford delivery. I mean, it makes no sense that a restaurants, which is not kitchen constrained from a capacity standpoint, is it's on Lee constrained by how many people are at that restaurant.

So if they could, they would be more than willing to provide take out or delivery. But it makes no sense for them. Toe have their own delivery stuff. And he let this problem because his parents opened up a a small medium says, um, local sir Store ends where he worked in the restaurant industry and he drove as a driver. And he's just experienced this by himself. Andi noticed that this is just broken and deliveries just the much better experience.


Do you mind going even deeper on that experience with with Tony of, um, just even and something is Aziz massive his door dash? What stage did you invest in? And do you mind actually walking me through from if you remember the first email introduction? What what caught your eye about it and and even what caught your eye and intrigued about your first interactions with with Tony just a walk? Listeners through what it looks like Teoh for Sequoia to meet with the founder. And really, these things sound really big and and massive Sequoia meeting with Doordash. But it's really, you know, they really come down to Alfred meeting with Tony. Do you mind walking us through that example if you remember the details?


Sure. I remember meeting Tony through an email introduction, and I've always saw this is a problem that it's very hard to get delivery in San Francisco. It's not that hard in New York City, especially in Manhattan. And so, like I I've always been fascinated. Why works in New York about anywhere else? It doesn't work. It works in New York because of maybe density and maybe because of public transportation. And it may be a bunch of things, but why's delivering not more popular? And then I'm not a seed round when he was graduating from I C. But I was just fascinated by him. This is a person who son of immigrants, immigrant himself. Very you just you just know he's He's both very charming and has an edge.


What? That's that's an interesting combat. What do you mean? What were the things that you picked up on and and you're like, Oh, this is really is an interesting combo


He's just very He's very warm and Friendly says, you know, sort of addresses you by name, looked you up and understood who you are trying to make a personal connection at the same time, just very intense about the way he's describing his his business and how much he loves the business. Is this founding story on way back to, you know, his mom coming Teoh to the U. S. And she was trained as a doctor in China but could be a doctor here because it didn't make sense to rely since here, you know, sort of worked is in local stores and restaurants and and just kind of knew how the restaurant industry weren't and how may no sense that they couldn't. You know, they serve limits to a restaurant is how quickly you turn tables because you generally have plenty of capacity in a restaurant, and successful restaurants charge it either turntables very fast or they have take out or delivery or all of us. And I wasn't sure. Uh,

I'm gonna say it's my fault. Um, I wasn't sure at the seed. Whether this was a company that was serving rich people are rich too well at that time rich students on Stanford's campus? Or would it extend beyond the And I really struggled with this. I didn't want to pass many of my partners. Some of my partners were skeptical. It's on. My partners are like, Look, Tony's really exceptional. It is a seed. And so we always have these discussions and inside, and she wanted sort of know how a discussion happens in Santa Partnership. Some of your partners are supposed to help you and support you by sort of, because you obviously find this company fascinating and the founders fascinating.

And then some of them are supposed to play the skeptics. And you're always trying to balance dreaming with the entrepreneur and why knowing why doesn't work. So even if you decide to invest, the sketches serve a purpose by letting you sort of think through Okay, well, I need to work on these things because these air good points and we try to have a very intellectual debates about the the reasons why something won't work will not work more often than not, we get it wrong because we don't dream enough with the entrepreneurs on did say that we pass on the seed because we didn't dream it off because the data was only from Stanford. We probably looked too much on the data and didn't dream about the fact that hey, why does this work in New York City and now work elsewhere? And if you sort of have that sort of you, then you would probably have made the investments, even at the seed we pass on the seat. I stayed in touch with Tony, but clearly clearly today the passing on the season is a mistake. And I you know, it's still stayed in touch with Tony because I just I just found him fascinating in love through what he stands for as a person.

And, uh, we were sitting at dinner for some, uh, gathering. I don't remember what The gathering waas. We haven't to sit next to each other. We were catching up quarterly when we happened to be at this dinner, and we were at, I think, Chef choose in. Los Psaltis were, um and we just started talking about how things were going, and I just learn so much about how he broke up, how he's thought about things. He has thought about a system,

how he broke up the problem. Most people thought of it as there's only three or four stops and in and delivery, but he broke up the problem in tow. You know, at that time 15 steps and now probably a lot more than that. And to ensure operational integrity and doing that well, he had some of some thinking that wasn't from training but was through just just thinking through the problem that it's not hard to do any of these things, but to do it at scale and to do it wont to make deliveries consistent. It was going to be hard. This is the person who went to college studied. Um uh, Then study was gonna go and did. Cancer research was going Teoh, go into, um, D PhD program,

decided not to dio became Kinsey consultant. Portents thinks eBay and square, and I want a stand for business for these thought. Well, this is someone that I want toe wanna work, and so people, because allows you to really, really learn about someone. And I do like getting to know people for time. I don't like he's rushed buster. Shotgun weddings related to two investments. It's a lot better to get to know the partner that you're going Teoh work with for a long period time. One of my partners, my partner Rule Off, likes to say that fund raising you're not looking for money. You're looking for a partner. We really wants those kind of relationships. That's according


well, you touch on so many things. I wanna go a little bit deeper on 11 of which is the the observation around. Not dreaming big enough as being a big mistake. Instead of I think most people would assume being great investor is being. It's being even more analytical, being even mawr, sceptical and critical. And in Sukhoi from the outside looking in, it kind of feels like it is this very exceptional firm, one of the best investing investment firms in the world, because they're quite, it seems, like quite critical, quite skeptical, Um, and yet you're saying that it's it's actually the biggest mistakes or not dreaming big enough.

It makes me want to ask what were some of your and I do want to touch on Zappos. Um, but while talking about Sequoia, what were some of your impressions of Sequoia from the outside And you joined, I think, in 2010 right? Yes. So from the outside, looking in 10 years ago to being on the inside 10 years in what were some of your misconceptions or appropriate conceptions of of Sequoia from the outside looking in And now being on the inside?


Yes. So I I worked what? Sequoia For a long time it was both at, like, exchange on a topless. And so, to your point at both and outsider's view and now an insider's view it I would have, you know, sort of summarize my experience with sick wear on the when I was outside is like, these people are all exceptional. They're so smart. They they ask, you know, serve the the toughest questions. They asked the most insightful questions. They always seem prepared, and they're so long term thinking.

Most of the questions were not like, Why did you miss this quarter is like, What do you think we did wrong this quarter so that we don't get it wrong next year? And so just even in the phrasing of those questions. It was quite impressive and way we worked with Mike Warrants and for both link exchange and hapless. And I thought, you know, he is very much one of my mentors. I would say on I wanted to watch from them But But the thing that was quite interesting about all of those things is that you know that it's not just it's just not magical that these things happen. It just requires hard work. And they are. We are very, very focused on being partners with the founders. So, you know, when Lake Exchange was not going well,

Mike Morris stepped in. There was interim CEO begrudgingly, because he's like this is not a good solution. The founders asked him to because they were in fighting. They thought that they needed someone to be interim CEO, Um, to help, like, fix some of these things. And, you know, he was there when we one or two days a week. And then he was. He had his job at Sequoia. He was looking a new and thus plans he was running. I think he was.

I think he had just been handed the keys of the firm at the time from Don Valentine to him and Doug the only because this isn't 1998 99. And so it was. It was a time when, you know, he probably had a lot of stress. And by the way, we're not a star company. He was in here is an investor in Yahoo at the time, and he just wasn't going to let up or given. Nobody leaves anything on ah left on the court on. And I think there are just it's lessons around. Just persistence, hard work and being prepared. Um And so I saw Mike always came prepared and preparation requires, like you just always showed up and knew exactly what was in the materials beforehand. You weren't trying to flip through the materials during the meeting,

and he was super helpful. Whatever we asked, he would try to do. And if he didn't know the or have the answer, who would find someone within has never have the answers. I later found out done. You know, if you didn't have a connection, you would ask the partnership for those connections and then help us with those connections. I later found out that If he didn't have that connection, he would go through this acquire network and figure out ways to get to some. That said, someone threw that. We have been trying to sell Nike for nine years at Zappa's, and, you know,

we had some relationships. But every time someone will get close, that person would get reward. And so trying toe get the relationship. Bottoms up wasn't working. Okay, well, my heard that story diagnosed the problem, and it's like, Well, if it's not gonna work, bottoms up. Let's try to find our way top down. Well, the CEO will take our call. Okay,

fine. Well, who's on the board that used to be an employee of the company they literally thought about? That was like, Well, he must if it was an employee of the company. At some points, they probably still have connections internal. And so he got us in touch with someone on the board that was a former employee, And that's how we signed up Nike. Um, and you know, it's it's what those kind of little things that they seem like little things. And by the way Tony and friend would have said, you know, we probably would have eventually got Nike. But even just accelerating it by a year makes a huge difference in in the development of a company, even even at, for example, it's at that stage


and that such a smart way that it sounds small. But I the reason I say, Well, because that is a brilliant little tweak of a former employee that's on the board because of yes so much more. They kind of have the over and the under of the CEO in terms of influence.


Yeah, that situation of the serious like, Well, I can't be bothered with this. What do you take care of it? They can, because they know who. True to go talk to, um, from a team perspective. And then and then just, I think the sort of always looking, being super clinical and local about the state of the company and its affairs and introductory. Mike always shared. And once I start came into the point of shellfish. Yes, sir.

Of the Learnings of Sequoia. What? We We have 47. We have now 47 48 years of tribal knowledge, and that knowledge is passed down from apartment A partner. We learned from each other. We want from our founders, and we try to sit up in part that back to our founders and then on the inside I would say I thought I knew how long term thinking Sequoia waas But that's a different level inside of sick oil because I think we really, really think longer turned and almost anybody else on the border and in some cases, even even more so than in some situations. The Founders Service now, which is, uh, quite successful in public and market cap of, uh, tens of billions of dollars,

was at a time almost sold because the founders wanted got a sweetheart deal that was probably in the single digit billions. And so just so there are there times we get it right because we drained, we dream big and we think long term there times when we get it wrong, when a business that is that will inherently keep you humble. When I sort of joined the business, I asked Mike what has kept him, and then I asked the same question Teoh, a bunch of other partners like Doug and Rule off Don Valentine. They kind of what has kept you in this business. Um, and they have different variations of this that you get to the sort of work with founders who who are building the future. You. He keeps you young because you're always trying new things. Um, there's some variation of this novelty gene that we all have. That's the reason we work in entrepreneurship or in creative endeavors or in venture investing.

And then there's an element of ah similarity that many of them said was. This job keeps you humble. You could be right about the investment thesis and lose money, and you could be wrong about the investment visas. Get lucky, sell the company and make money. Uh, this job will keep you quite humble. And we know I after I left like exchange, I could have gone to a variety of other partner chefs. And the reason I joined Sequoia was because there are long term thinking. But they also just love working with, you know, sort of young, interesting entrepreneur is that just have a seedling of an idea? It's never too early to come to sick oil because we generally are very,

very willing to bet on a a set of ah, founder whether she is trying to, uh, reinvents some consumer business or an enterprise business anywhere in between. And, you know, come with that dream of how you're going to re imagine the world. It's never too early comes us because we'll rift with you and dream with you. And if we get it wrong, we'll stay in touch and maybe we'll get it right the next time. And I I I also just tell the story that for Zappos, because you want the inside outside story like a change had this easy fund raising situation because we hadn't offered to be acquired by Yahoo and my born, and after that we decided to turn that down. My horns gave us a term sheet to invest in the company, and that seemed like at the time it seemed heart instead of pitched everyone. But it was relatively easy fundraising for sap us.

It's the square past twice before they eventually invested. So whenever we're not always gonna get these things right, friends, we try to get her right. More often than not,


you mentioned two things that I'd love to ask about, that you say, said that it's it is. When you got inside, it was they were thinking much more long term than then you had thought before. What are some specifics of what you mean by that from being on the outside and then coming into into a place like Sequoia?


Well, I gave the example of asking the founders to reconsider cell and serve you no service, no on and and shooting shooting from for much bigger and longer. Adds it there. Um, that's one example. Another example would have been I think everybody celebrates. Um, you too, being sold. But I think my and rule off also imagined YouTube to be much, much bigger on. And they are today.


Same with certain world world's second largest search engine. Yah.


Same is true with PayPal. PayPal is larger today, then it when it was sold to eBay and then when it was, you know, and then spun out of people. Those are just some examples service. Now pay, pal, you two were okay. Place the play long. Um,


do you think younger Alfred Lin 2009 Alfred Lin, without that perspective, would have said no. These air good acquisition opportunities or YouTube If you were the the CFO in CEO of YouTube, would you have and without that sequoia, maybe mentality or experience what it said? No. These air, good deals.


Yeah, I think the with the height with this sort of a ZAY said. With SyQuest Travel wisdom. You kind of know when these situations are with more more information and seeing these situations playing, you kind of know that's in general Playing long is the rights way of going about it so long as you ultimately prevent. And the question is, will you ultimately prevail? I think, for example, I used experience this, and I've experienced this where you sell a company and it's bittersweet. And there's a sense of, really if you got the company and to say it into a safe harbor and you don't feel that great about it when you feel good about it is usually the right decision. When you are bitter sweet about it, it's usually like because you you always think about what could have been because there were signs of potentials, different roads that you could have uh, ended up,

and I think you know when you have a dead end and in that situation, you're happy to sell the company or to get out. But when you have a fork in the road whether to continue to build or not, that's a lot harder. The right talk all is often at the the men that situation. You could potentially go up or you could potentially go down. And so if you can only go up into the right, you would never sell. If you're going down your crashing and burning and trying to sell as quickly as possible, it's does Min Max situations where you have to start be much more thoughtful. Are we going up or going down?


Do you feel like you sold at the right time with Zappos?


Look, I think it's hard to complain about hapless. Um, I think Tony got to do what he wanted to do, which is, um, create jewelry and then Las Vegas that this is sold for stock. So we got $1.2 billion of stock and I think $138 a share of Amazon if you had kept it long. EMS on stock is like $326,400 today


would be like a $23 billion acquisition.


So yet So, yeah, I don't think many people held it all. Maybe Mike Warrants held it all because he was hell. He likes the hold companies that, um, I think the it's hard to complain about that situation, and I think Amazon has allowed it to Amazon has been a great acquiring and has allowed it to flourish in its own way while adding value to the company. Um and so I'm a big fan of most situations like that where if you want the power of a large company and they allow you to run it separately as a separate division, let's maybe the best of both worlds. You don't have to deal with not to deal with public disclosure and accounting issue in just reporting and all those issues related to being a public company. And you can one the company as a small division inside a large company, as if it wasn't started. Another friend of mine, the founder of audible down cats, hated running a public company, realize that sold the company to Amazon and Audible has thrived underneath Amazon,

and and so there are many. I guess what I would say is there many ways to success and it's Sequoia. We just when we get involved with the was a founder, we want to help the founder reach their full potential and the company its full potential. And there are many ways to succeed in multiple past success on and time this. Back to my mom when I when we sold, like exchange the Microsoft and Calder and older that we had just done that and she her first question is one of you going to finish your PhD? She was a little just point. A few years later, she asked again and and isn't come on like I don't I don't think I did poorly for myself and, uh, that I could have finished my PhD and still gone to business and worked at Google. And the people who joined Google in 1998 99 would have have done fairly well as well. And so back to multiple ways of succeeding. There are many paths to success, I think.

Did you just have to find your own path? You have to make your own choices, and there may not be the most popular choices, but they have to be your home, and you have to own them.


Well, as one of the best investors in the world, I think you've Ah, I think you have done all right for yourself, Alfred. But the I do want to ask about ah, Sequoia a little bit and what it is like on the inside. Just tactically when you get that introduction from from someone by email for a founder, what are the next steps? Do you Do you just think on it for a day, walk me through the entire process to ah, yes or no. With with maybe one recently in the last few months of just email introduction like you would get four, I think, um, I remember who introduced us. Maybe is Paul Graham. And then just from that introduction via email to chatting with a company. Then then what you're saying of the conversations with the partners? Do you mind walking me through that whole arc?


Yeah, sure. I think Paul Graham introduced us. He sent an email and raved about you. And I talked about your idea. We sort of take thes introductions. Seriously. We got connected and, uh, I tried to ask about an any materials. I can learn about both you and your idea and trying to meet you over zoom or back down. We met in person to hear the story, and I think founders are always fascinated how I don't make my pitch the best pitch it can be. I want to say that it's for us at Sequoia. It's not about the pitch. It's about you and your insights. It's more about that than it is about the pitch.

Now. Some people are not good at speaking extemporaneously, and so they want toe Have ah have a pigeon, Hamed Jack. And that's great. That's fine. Way asked for the pitch on the debt so that we could get up to speed. But if you don't have one, just want to talk or use less. Sent us a document. We're happy to learn from you in any way You believe you can express yourself the best. We're trying to get your original thoughts and Teoh come through. Get that through a crystal clear way for you to express yourself. Some people do that very, very well in person or over. Sorry,

just by having conversation. Some people do that very well through a memo. Some people do that very well in a duck, and we welcome any of those four and I, you know, we try to get a sense of how deeply you thought about the car, the sort of market it. And then we try to rift with you and trying to dream about how big this idea is, and and then way we basically discussed internally and decide the next steps. If we continue down the process, we will ask you, Teoh, send us three references and we will call references that you have not provided because which want to get to who you are and what you are as a person. References tell us a lot. And so it's not just about first impressions. It's about what you've done and how you've handled yourself in the past, and it doesn't mean that that's gonna be your future. But I think having some information of how you handle things in the past, this lead us to understand how you're likely to have all things in the future.


Well, you and you touched on with with Tony and and Door Dash It's it. It's something women I mentioned on the podcast. Before that, it's it seems like 90% of fundraising actually is way before the pitch way before that meeting. It's your own story of what you've done before you just talking about the door dash investment. It felt like you spent the majority of recounting what what attracted you to the idea of of what Tony was doing way before or his background of being an immigrant and an immigrant's son. And and and so much of that or even, I think, even touched on him, telling you about what they had figured out with Door Dash. That delivery was 15 steps and not just three, and that seems consistent with what I've personally seen. But what it sounds like is, is investors, M o, is it?

Yes, there is the 30 minutes or 45 minute coffee, but it is just 90% of the pitch is not the deck. It's what is the business accomplished, You know, since the standing start 16 months prior, or what is the founder been doing with their lives for the 25 years prior? It seems like it That sounds consistent is, it's There's a lot of in Ornette, at least to what I would have thought as a founder, coming into a quote unquote pitch, an inordinate amount of, um, of weight put on on you know, so much more than just that, our long coffee or 45 minute coffee.


Yeah, one of the things that I think people, um should your your audience should know is that it's a quiet we don't team with a lot of people, and we would take these decisions very seriously if you used Amazon speak their Type one decisions, right? Like we decides a partner, you know, if it goes well, it'll be a decade or longer. If it doesn't go well. It's still like 5 to 7 years, so these decisions are important to us. It should be important to you a za founder, Um, and I wouldn't take them lightly. You want to find the right partner and the partnership, like at Sequoia,

we we want to help founders pursue excellence. It's never too early to meet us way tell you that, but it's also what the reason we spent some time so much time trying to think turned to serve, understand you is is trying to understand whether we way are generally in a good position to help you and whether you want to pursue excellence. Our tagline is we help daring founders Bill legendary companies, and we believe everything anything is possible. We hope founders who come to us also believe that um and we we seek out out out liars we want to find, find people who are all in on their mission and getting to know why you are all in on the mission is not a oh. I started this company two months ago, and now I'm looking for seeing money or I founded this company a year ago. We have some seats traction. We took some seed money. Now we have some traction, and now we're raising our Siri's A or we. But this company, three or four years ago now we're looking for growth capital.

Huron, our country. It's the story of how you got here is important. And the story of how you're gonna get from here to the promise Loon is also important. So don't forget and to sort of to bring this down, Teoh like ground. Brian Chesky had this great story of why he won't have this relentless drive to reinvent cookie cutter travel. It wasn't that he just said I want to reinvent trouble He specifically talked about cooking covered travel, drew houses. Story was quite interesting. He experienced the personal pain of not being able to sink his files. And maybe the first few tag lines are not the best we could see past the few first few tag ones on and see a company where this where everybody keeps their photos and files on Dropbox and Andi from house. You know, she she just She was like living the pain of ripping out pages of shelter magazines, Architectural Digest magazines because she was doing a remodeling. She was working,

her husband was working and they were passing these photos in a vanilla envelope like How crazy is that in this day and age? And she was like this. There's got to be a better way to do this, and the Collison's are my favorite. They didn't have a single line of cubs when they when we were introduced Samel and introduces. He was a scouts, um, for us at the time, a woman, and you just know their their passion for for just being difference was was through and through finding their way from Ireland to the m I t. And Harvard. And those are the things that are interesting. And then, yes, why is the payment industry broken? All those things make you who you are and we're interested in about and what got you here won't get you there. But what got you here is a way to judge just how much you've pursued excellence in the past and how likely you are to pursue excellence in the future.


Uh huh, Yeah, it's a Z you're talking to. It's making me thinking you touched on. It's just not that it's not about the pitch. And you mentioned kind of ah, threat. Here is it's it's not about the pitch. It's not about the capital is about partnership. And and it seems like so much of what you think about is partnership dynamics. Not kind of company dynamics, not just what can this, you know, black box printing money do. But what is the order, the partnership dynamics of you partnering with a founder and Mike Moritz in his case jumping into? Then afterwards,

you'll become the interim CEO. I'm sure that's just always on his mind. From then on, whoever a partner with I might actually have to become the CEO of their company. So I better choose really wisely and very thoughtfully, and it really yes has very little to do with with the deck or that you know where that company is at that moment in time, it actually makes anything about Founder Dynamics. And some of the research out there shows that one of the biggest reasons companies fails is founder disputes. Kind of just tearing companies a part of leading into no man's land or to sub optimal outcomes. Air selling early. And I did want to just touch on what were with you and Tony shades apples. You know you would work together where you have gotten to know each other with the pizza, um, partnership of sorts and then link exchange. What made you want to team up with him again? You know,

third time with with Zappos? And how did you think through those those dynamics of of your complimentary skill sets back then with with Tony, how are you? All you know, what are the strengths and weakness kind of comparisons that made you feel like, OK, there's a great partnership.


Well, I think Way had known each other for a while, and, uh, we had a mutual level of respect for how we solve problems and solve them differently. We would often try to solve a problem from different vantage points, but end up in the in a similar spot, and so that those are greats. Those kind of situations air, great partnerships. I think that's true for first chorus partnership. By the way, I think we have partners who look a A business. We have people who you know, were engineers, product designers, people in sales and sales off that I was a former rule off was a finance person.

I was a finance person office person. You know. Brian was in sales and sales off Doug was in sales and sales office. We have my chronology bill corn who were from the engineering side, just just Leah's looks at things through the product lens and the marketing lens. Stephanie often looks at the consumer product experience. I think we you know, we have Bogomil who was a product builder. We have Sean was a founder.


That's phenomenal, that you can rattle off kind of the different. Not just all of the partners, but their their perspectives in which they're going toe toe. Look at an opportunity, just a side note. That's really fascinating.


And so you have and I Hopefully I'm not trying to run off everyone. I'm not trying to write off on us how to be ex inclusive or exclusive anyway, just like rather than lots just show you that we have, you know, one of the ways that describes because we're like the Motley Crue adventure, because people are all different and I think we can look at a problem from different angle and get to the same conclusion. And when we do, that's almost always a good conclusion on then we debate where we have different opinions and trying to get to a decision as not not consensus. But we're truth seeking. We're trying to get to the truth, and so that leads us. I hope to better decisions, but I know for a fact that when we become an investor and we're all in, we become your partner and we really do think of it as a partnership you have access to whoever your board members, plus everybody else on the team, Um, and your primary board member,

maybe maybe me or someone else, But they have access to all this knowledge that that there can help it. So indoor dashes situation. When I needed some help, was engineering hiring. You had Tony talks that Bill corn and like for all, Um and so you have all these sort of abilities that you don't get if you don't have a wall. Ah, sort of complementary team, Well oiled and, well, complimentary tea. Um, And when you know I have ah different search with the product surgeon for dolls kill and I'm having just and are are Vitria product Vicky Talkto to Bobby the founder there because they wanted design sensibilities on, and both of them worked at Polyvore. So,

you know, sort of Step one is to get the investment decision right. We can look at a company from 360 to review, and Step two is once we are your partners, we could help you build your company from our 360 degree view. Um, and I think that's true of Founder Dynamics to founder Dynamics management Team dynamics. It's not about completing each other sentences. It's about knowing each other wellness so that yes, you can complete their sentences. But you can also think like them and bring to bear different ways of thinking. Um, okay, you think this way. And let me just show you how I think. Do we do we get to the same answer,

You know, finance. A lot of the people will understand. We generally build models bottom up and top down, and the best models sort of converge bottoms up and top down. You're trying to get that relationship in a management team in any sense of decision. I also just think about the book thinking fast and slow, and some people will have good abilities. Think fast on a particular situation because they've seen it 100 times and other people will have to think slow because they haven't seen in 100 times. But they're asked to also have an opinion, and in that way, you know the person who has to think slow has to think for first principles. I think the combination when you have fast thinking and slow thinking when they combine and you get to the same answer. It's usually a pretty good answer,


right? Yeah, the Would you would you describe yourself as, Ah, if you had to choose which, which side of the equation you lean towards it, the slower thinking, the more methodical approach? Or is it kind of now 10 years in? Or you can you slice and dice up an opportunity pretty quickly because of pattern recognition or just experience?


It's funny because we have, we think, fascinating, slow in different ways in different places. Just thinks that I could just spot an error on a spreadsheet or the number that is off trend, you know, in like in like, 10 seconds or last. It's like it's obviously, you know, I've seen so many spreadsheets coming up finance that I can I couldn't do that. And so in that situation I am thinking fast and my how did I develop my thinking fast skills. It was actually originally thinking slow it to build these models, and I know exactly what kind of errors there are are likely to happen. Um, and I I'm like, just how do you like look at an ad and no,

it's gonna perform. All are not performing well. She's She's been in the design space in the advertising space for someone she can spot this things, but how does she gain? That is true through the service, working through looking at ads and figuring out which performed, which didn't. So I think if you want to be able to think fast, well, you have to put in the hard work of thinking slow. And then we were We all need to think fasten things slow because they're just areas that we don't have experiences. And if you want to develop and grow as a person, that's how you develop and grow.


Yeah, well, the to round out the founder dynamics peace and and give color in. In my experience, my first start up I built, I brought on co founder, a friend of mine, that we were basically the same person. I thought that that was a fit because I think early on, at least in my career early on, I was seeking validation more than I was seeking. Ah, complementary skill set. So I was seeking okay, really smart friend that were very similar thing. We think about things very similarly and solve problems very similarly. And And I was 2122 thought,

OK, this is a great fit because of that. And when you start to actually to on riel problems, you realize how limited is to just have the same. It's like having to pitching wedges like, What's the point of having two of the same clubs and your golf court and and really started to appreciate needing, um, different skill sets? And they appreciate just the limitations of my own thinking. I think that's one of the ways that that that founder dispute kind of statistic of being one of the leading factors of companies failing is founder disputes is I think a lot of people would think it's because you get founders that are super different and that couldn't obviously lead to it. But I think it also happens maybe just as much where you get founders that air basically the same and are just fighting to solve the same problems in the same way rather than separation of concerns and division of labor. I wanted to ask second, the last question is with that clinical approach that that is needed to assess the health of a business. As you look at Sequoia the last 10 years and in the next 10 years, what is Sequoia done really well in the last 10 years? And what does it need? Teoh, Maybe factor and a little bit mawr Or Or make sure that it sees the opportunity for the next 10 years in the sense of what is the health of Sequoia for the last 10 years and doing things the right way and where the areas that you as an operator, as a consummate operator, what would you say are the areas that Sequoia is going to start to invest in more for the next decade?


I think we don't spend a lot of time thinking about what we've done well, it's a are fit. Our performances, if you ask our appeaser performance, are we've done really, really well, and I think way have done well in the last 10 years to build Sequoia into not just performing in the US in our early stage business on our growth businesses, the U. S. But also But we're we have built a pledge, a global platform. We have. We have operations in China and in India. We have a hedge fund that we have a heritage fund, and to a founder that might not be all that consequential when you're you're early stage. But it has. We have the ability to help you expand globally because we have lt's all over the world. We have LP's in In in Europe and we have operations in India and China and so we can help you expand their and Southeast Asia,


which, which is for listeners exceptionally rare for ah, for of inter firm toe have that are. And you guys set up the China offices like 20 years ago, way before it was kind of hip or in or obvious that that was gonna be, ah, a new technological frontier. So kudos for that, Ben. Yet for founders listening, that's really rare for a firm to have that that type of foresight and tactical offices in those areas


Yeah, I think we set them up 15 years ago, not quite 20 years ago are less so. Over the last decade, we've evolved from a U. S business, so global business on and and we performed while across all of Yes, there is ah, all all sort of investing from early stage seed venture Growth. Um, across the number of JIA's. What we need to do for the next 10 years. It against it. We were constantly evolving, which constantly trying to figure out what we need to do nuts, and we don't have a crystal ball. But the one thing that are comes down to basics is we need to continue to look at it and look at the world and how it evolves and try to help founders build legendary companies.

Uh, tomorrow we want to be the most influential largest shareholder outside shareholder of the most important companies that tomorrow. And that means working with founders as early as possible when they want to go disrupt the world on DSO. That means continuing to find ways to meet founders like herself and like Brian Chesky and like others that want to go change some aspect of the world. And, uh, we love what we do. The reason we that this is like to me, just a fascinating industry, like I get to meet people. We have such a burning desire to fix a problem that they see in the world, and whether I agree with them or not, that passion is just infectious. Um, it just sometimes like some of the conversations I have just fascinated. How did someone think of that?

And the creativity can be small. Could be big, but some of them you just can't get out of your head. And it could be putting a pizza oven in a dorm to wanting to revolutionize delivery, to reeling. Well, conferences. I mean, why? Why would that be an interesting business for? For Eric Yuan? He was like Everything is broken about this and knots And he could be. I don't have all the details like he would, But, like this is what's broker about WebEx. I was there,

and I know how to make it better. You know, when you meet people like that, this is like the most infectious and the most rewarding job in the world will be gets and do that now. Obviously, it's also not just fun and games, right, like we have to help our company's pivot a lots. During the post covert world, there are situations worth investments to not work out Half the time when we invest, we don't recover capital because this is this is Ah, this is a risky business. But, you know, I get up every day because of founders like you and Brian and Tony and I. D and,

uh, Nadia and A. D and Co. They just want to go change the world. And I have the prolific privilege of working with on the other side. That, too, are LP's. They're doing great work to, and I get up every single day because they fund students, they fund vaccines, they find poverty, they fund social, they fund the solution of poverty. They're trying to solve social justice. They have tried to solve inequality in the world. And so that's 1/4. We get the privilege of sitting in the middle of treatment causes. In my opinion,


yeah, I haven't thought too much on that other side. But with with sequoias track record and the ability to choose your LP's, it's it's a really amazing It must be a really cool opportunity to say Well, we obviously want to support the founders on this side of the question, but with the returns, you know, if the 20 x fund we also get to choose which are the causes on the other side we want to support and that's Yeah, that's a part of the question I had had thought about. What is Give me one area that you would say that that the Sequoia does need to level up in because I know you. I know you have it in you because it's just how you think going into this next decade. And I know it's a sensitive question because it's it is the company you are operating within, but the firm your operating within. But is there an area that you can share? They'd say, Yeah, this is one that's on my mind that I think we do need a level up in, um, based on the last few years or based on what I think we'll see in the next few years.


Well, I think Sequoia will be defined, defined by how good we are finding our, uh, we're only as good as our next investment. So we'll be defined by our ability to find and the next generation of great founders. And I think the in terms of leveling up, we know historically that great companies air founder during tough times. Uh, this is a tough time for sure that we're all living through. But great company, great founders and great companies emerged through through these situations. Google survived the dot com bust. So did pay. Pal. Zappos has to survive 9 11 and the dot com bust is well, um,

and the financial graces. And so and, you know, the financial crisis era baby got started strike that started soon that started. So we're in a situation where I think the next generation of great founders will start great companies. And no, we have to love a lot and make sure we attract.


But last question for you, Alfred, is what is something that you think a lot about, either personally or professionally. There's one of my other. You'll go to questions for guests. What is something you think a lot about, that you rarely ever get a chance to talk about personally professionally kind of across the map, something that takes up an inordinate amount of mindshare and in your head that you rare that just rarely ever comes up in conversation?


I've never been asked that question. I think, um, what I think a lot about I think about recently I think a lot about like now this generation of kids are going Teoh. Just think that there are so loved, which is great, by the way, because their parents around them all the time. And I think that's a great thing to have. And, you know, I, um, I I have a son who's nine and I love him And, um, just like any father does and my wife is great and we just want it raise a responsible human being. And I just think that that takes a lot of mine,

Sure. And, um, it's It's one of those things that you're always not sure you're getting it right. So my son's kind of like me and nerd, and we're trying to make sure that he doesn't just study math and want a program. But he also is well rounded and plays, plays piano and learns chess. And but also like that, there's air, still all nerdy things, and so we're trying to get into, like, place in sports and getting him skateboarding lessons in basketball lessons. And I showed up at school one day and I noticed that he was like me when I was younger, sitting in the corner when people were at recess playing playing basketball and and he was like,

Well, I just don't like basketball was like, Why? Because I don't know how to dribble on and how to do this. I don't do that. Make boy, um, you know what, do you just get in there like you do? If it was a math problem, it's like, you know, 100. So it's kind of weird. Um, Tissera talk about this because we all I think we all have our own insecurities about who we are,

and it shows through your kids. That's kind of auditing, right, that your kids are many, many usar or many anti use. Whatever it is, your insecurities and their insecurity shine through, even if there should. Their answer you, um and I find that fascinating and looked to me that the most important thing is to raise someone who will will contribute back to society in their own way and be responsible, human being una this is the ultimate startup. In one sense, you're gonna you had put all this work in on dure trying to focus on the inputs because they're no outputs. Um, there's no you won't know for 30 years or, you know,

now 20 years for my son, whether he is a productive, functioning member of society. Because right now he's just a kid, Um and and making sure that that goes well is is also it's not reversible. Yes, their resilience and all that. But I think we screw up our kids in ways because we didn't either. We want toe, have them have a certain childhood that we had, or we want them to have a childhood we didn't have. And either of those things. They're quite interesting to meet some things through.


Yeah, with our daughter at 2.5 those thoughts, that's Ah, it's funny. You bring that up because I think it is. It almost dominates my wife and I's conversations these days, but it does. Yeah, it doesn't come up in conversation, but it's certainly with Theo with friends or outside of our family. But it certainly is something that we think ah lot about even at 2.5 years old. Just what her tendencies to do this or that. I wonder where that comes from. I wonder how you know I can import. There's some influence on the downside of that or the upside of that. And ah, it's.

And from starting with with the conversation with your parents talking about partnerships, talking about founders, talking about and ending it with with your Children, it's It is very clear that below the water line with with you, it is all about human relationships and and those relationships leading Teoh impact in the world. That is, that that is a great one. It's I can't imagine what it's like at nine, when these these characteristics of your Children become even more pronounced. But, um, that is a great one to end on. I don't know if if you if there's closure there, but it's certainly hopeful just to hear that it's something do you think a lot about because it's Yeah, I can map it directly to our lives and our conversations as a family.


Yeah, I don't think it's Ah, there is no closure on that 10 are you know, hopefully there is no closure. They're always gonna be your kids. And here I was gonna worry nothing as your parents while we told you and my parents told me and it's fascinating, Teoh, You know In some ways one's life work is passed on through their kids because that's that's hopefully your greatest accomplishment is how your kids turn out.


If Onley more business podcasts had that sound bite out. Alfred, thank you so much for your time. I really appreciate the generosity and wisdom in the time they shared with with listeners. Where can people find you online?


Uh, they could find me. They could email me Lendell I and that's a quite cap dot com. They confined me. They they can look up my bio the score dot com us core cap dot com websites. It's easy to find me on Lived in a swell. So, uh, I hope to connect with you more in the future. Don't don't just reach us to me Every when you need me to show up on a pocket on that, you connect with your audience whatever where they like to reach out to


be awesome. Thank you so much. Alfred. Have a great rest today. And, uh and I can't wait to see what the next decade holds for you and Sequoia.


Well, thank you. Thanks for having me on the show. It really enjoyed it.


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