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I'm Cara Swisher, executive editor of Recode. You may know me best is the person who invented the Edison machine for Theranos, but in my spare time I talk tech and you're listening to Rico Decode a podcast about Silicon Valley's key players. Big ideas and how they're changing the world we live in today. In the Red Chair is Mike Moore. It's the person who is just laughing at my fantastic Theranos joke. He's actually one of Silicon Valley's most successful and powerful venture capitalists. It was not always thus growing up in Wales made you understand what being an outsider is like, he said about his modest beginnings. I came to America in 1976 without actually knowing anyone here. No grand plan whatsoever. One thing led to another. I wound up as a correspondent for Time magazine and was transferred to San Francisco at the time. All I knew was that California was the left most part of America, and after that you fell off into the water. Well,

after investing in a plethora of big winners in Tech, from Google to Yahoo to pay power to Zappos, he's still pretty afloat, though he'll leave out his investments in Web Ban and E toys. Sorry to mention them, but they're all part of leadership. And that's what we're here to talk about and a new book he has penned with Manchester United manager Sir Alex Ferguson called leading. It's about soccer or football, depending on where you're from. And it means a lot more than just the sport. Welcome, Mike. Thank you for having me. No problem. So I'm fascinated. You know, we all know you as a tech person here and a correspondent going back further. Ah, journalist Tell me why you decided to do this book. I

had grown up a CZ you mentioned in Wales and like a LL Boys of my generation, Yes, the United had always occupied a special place in our firmament and over the years had kept up with the club and then followed. It began to follow it more avidly in the last 10 15 years when the, um, network television started broadcasting the Family League games and got curious about the club because off it's really wonderful performance under this legendary manager, a CZ. They call the coaches in Britain, Sir Alex Ferguson, and began to wonder how any organization could keep up such a consistent winning streak move over four different decades. Because obviously that had great developments for sick wire itself. We thought about building and went about

building a capital founder. You one of the founders, know Don

Valentine. That's right. But I joined in 1986 and we're still smarty. Small right on dit was really before Silicon Valley, uh, became the force in the economy. That gun today and people had bean. You know, if you beautiful being suggesting I write about Sequoia and I didn't want to do that for a variety of reasons. And I thought writing this book was Alex was, in a way writing a book about Sequoia without

writing a bicycle, Right, because there's been other venture capital books, Ben Horowitz wrote one. There's been several, actually,

yes, but it was, you know, sick or has been around since the early 19 seventies, and I also felt the United and Sir Alex exemplified and stood for a lot of the things that we hold dear. And so that was the reason. How did

you get in touch with that? You've written two other books that two or three other books

to other books a long, long

time long, long time ago. But one was on multiple Apple when was on Apple and the other

yellow was a book about Chrysler in the automobile, in the idea that I wrote in the late 19 seventies, right? But eat each of these books, whether it's this one of the current one leading or the previous book about Apple or Chrysler. Each of them were books about an organization headed by a very strong individual,

right. In the case of Chrysler, Lee Iacocca in the case of Apple Steve Jobs in here Alex Ferguson. So talk a little bit when you say it. It's like what's happening in your which you're trying to do it. Your venture firm talk about what they might have in common or what? The commonalities of great leadership. Because, you know, Sir Alex Ferguson one So money, Uh, you know, the leading soccer club in the world? Um, what did that? Some of the strengths that he brings, What has he done correctly? And then let's talk about things that he talked about. And you've talked about that He changed. Um, but the thing

that he was focused on and it's what we've tried to do it sequoias well, is that united? He felt that you before you had great performance on the football field, the soccer field. You had to have a very solid organizing right, and it had to be really developed. And you couldn't just hope to cobble together a team that would give you a result on the Saturday afternoon you had to build your guns.

This is a great club. You're trying to build a great club before you build a great team.

precisely right, which is exactly how he would put it. And I think that the way that you have consistently good or great investments is toe have a very solid organization in our case, a very solid partnership, and so on the team that you can develop over a long period of time and that then also produces consistent,

consistent. And how do you do that? In the case of this, in the case of the venture, from what are the

key? And that's a very it's it's very similar, although in the venture business you or in the investment business, you have, um, one huge advantage, which is when your legs don't carry you as quickly as they used to. You can keep on playing on, and that's tough to do, obviously, in the right in the world of world of soccer. But the similarities are, at least for us, a really great, which is, um, we've always had a great fondness for finding people that we bring to Sequoia when they're still pretty young. Which he didn't you,

David Beckham and others Cristiano

Ronaldo on the whole bunch of then teenagers boys over who are in their teens and he developed them.

And when he got there was an older group and there was a lot it was not, did not have the greatest reputation. Correct. That's

right. Yeah, it in Manchester United's one of these soccer clubs that had a great reputation and then went through a fallow period of almost 20 years before here, right

and one of things bringing in young people that he formed. Then, correct,

he helped. They already had native talent, right? But he then helped form them, help mold them, help them improve. And in return, I got repaid not just with great performances but extraordinary loyalty and consistency and steadfastness.

So is that Is that a similar thing? When you think about venture capital thing for the companies that you've invested in is that I

think it starts it home. And for us, home is a sequoia capital, and those of this exact the same sorts of things that we tried to build inside of our own partnership, thinking that before we can go on invest and espouse these sorts of principles, we gotta practice it ourselves. But it is true some of the companies in which we've been fortunate

enough to be getting to the firm itself. There's lots of ways to do firms, and it's changing over time and reason. Horace has a different theory. There's been theories that these air sort of individual players. That's that's a common kind of when you think about venture firms was at one and they said, we we eat what we kill and I'll never forget that phrase from one big venture capitalist in I know What I was sort of like things alive. Yeah, but they were. They were talking about a very different set up. So when you're talking about what makes successful enterprise, you're talking about a team approach to investing, not an individualized venture capital approach.

We've always thought of ourselves as a team, and these days is a collection of different teams because we also work in China and in here aunt have a couple of other businesses. But it's a team approach and that no individual is bigger than the team. And that was true for Sir Alex and for example, when David Beckham and others began to feel, for whatever reason that they were perhaps a bit larger than the club right, they would trade and

controversial at the time a big,

extremely controversial but the right long term decision for United. Because the team in the organization is indeed bigger than every other than any individual. That's what we've always felt. And that's, um, you know, it's very difficult honor with, with a team of soccer players tohave 11 people consistently performing in every game at our high level, and this is the same. Same is true inside of investment partnership. And on a soccer field, a striker or defender is different from a goalkeeper. And so, too inside of ah venture firm. You know, people like Doug Leoni, Jim gets Rohloff boat or some of the Alfred Lin. Some of the other people at Neil Shannon, China Schuyler Andrew in singing India. Everybody has different strengths and persuading people whether it's in a soccer team or inside oven investment partnership to recognize the other's strengths and their own place in the team. Is Justus

important in both? Do you need to Sir Alex Ferguson? Are you that for Sequoia? Is that how it works? You do need a, you know. Ah, very like a Lee Iacocca. Very strong leader in those situations. There's always

somebody in in different generations who leads AH soccer club or or a business like ours. And it's being so Alex that united. I wouldn't, uh, say that any of the three names that I'm about to mention, whether it's Don Valentine who started Sequoia last year, it was the, um, um leader today or or myself. While I was doing it, none of us had either the left or the right foot of Alex Ferguson.

So we're gonna talk a little bit about what the key attributes to leading our winner and what are the places where people fall down and where they don't do the right thing. And he talked a little bit about things he used to do, right? And he used to do wrong. Um, and he would changed over time and things like that. So if you could think about wouldn't really want to get to is what are the attributes of successfully ship? Because it could be different in lots of different ways. You can have an Amazon like leadership. You can have a Google like leadership. You can have your venture firm and some others. But first, a word from our sponsor. If you're always on the go like myself and don't have time to sit down and read, audible dot com is a great source to be able to catch up on the latest bestsellers, listen to it while on the road or at the gym. Audible dot com is a leading provider of premium digital audio information and entertainment on the Internet.

Audible content includes more than 180,000 audiobooks and spoken word audio products. Audible carries audiobooks in every genre imaginable. Business classics, history and self development, Just to name a few. I'm going to be listening to the Alex Ferguson leading book. Um Audible is offering our listeners a free audiobook of your choice and a free 30 day trial membership. Just go to audible dot com slash decode and choose from over 180,000 audio programs downloaded, title free and start listening. It's that easy goto audible dot com slash decode that's audible dot com slash decode and get started today. We're here with Mike Moore. It's ah, the famous venture capitalist from Sequoia Capital who is also co authored a book with Sir Alex Ferguson of Manchester United, called leading, and it's about leadership. And,

ah, and comparing it toe toe, the soccer, creating soccer teams and successful franchises and successful businesses. So, Mike, what What do you think? The key after our their key actress, your leader. And you just have to pick and choose among whatever works for it, because I can think of all kinds of leaders and look on Valley and inventor firms and and in a place like Manchester United or they're comin

out of the personalities off the personalities, the accents. The sex may differ, obviously, but there are underlying attributes that I think span different organizations. Soccer club, venture firm, Technology Company Hospital. Um, the really successful leader will have. Bean is obsessed with something. It's the center of their life. It's It demands all of their attention. They have inner strength and conviction and confidence. They may privately be a afraid of failing from time to time, but outside they're outside. They're they're able to display great confidence. They're confident enough to choose their own path rather than react. Thio what others are doing and reacting to competitors because then you're not leading you really just

following right. Well, when you get to that idea of passion on persistence. Ferguson talked about, you know, his wife sacrificed a lot because he was always working and he was always folk. He was obsessed with it. Um, can that be sustained? And then we'll get to the other things because that's a really engine thing. That's a question of many companies. Is you talked about it? A lot of tech companies get to 10 years, and then something happens.

It can be sustained as Alex's unexamined ALOF on dhe he had. Even though he wasn't a founder, Majesty United, he acted like a founding. I acted with the ownership sensibility of one of the great founders that you'd find in one of the great silicon value of one of the technology companies. But whether or not it can be sustained depends on the individual and their examples of individuals who are able to mend. Steve Jobs is an example that he was able to maintain that obsession, that energy, that sense of conviction, that sense of purpose, that sense of destiny until very sadly, sickness deprived him

off. That, I would argue, is more vibrant during his illness to because think about everything was invented that would that we think about today after he got sick, which was interesting.

That's right. That's right. But eventually he obviously was hollowed out. Terrible illness.

And then there are other

people who get distracted and they no longer consumption that in the dry that propelled them. Perhaps during the 1st 10 or 20 years of their working life, when they enjoyed a great success, everybody, everybody's constituted differently,

right? Well, billions can make you soft from what I understand. Um, but we all right, so obsession and they can own persistence

and billions can also have no

difference. No difference at all. Absolutely. Um so, uh, obsession, such

assistance. Eliminating distractions, learning

how to be an example, like limited just not being pushed around by outside forces

when somebody's is successful, Sir Alex. So if you're running a company like Google or another higher Facebook or any of these high profile companies, there were all sorts of demands on your time by entities and people who will not benefit the business in any way. And one thing Sir Alex did, for example, was refused to go to lunch. Um, when he was working at matches, the United. You'd make a couple of charity appearances a year, but he always felt goingto have lunch with somebody was a big distraction. It took him away from the training ground. It meant to drive to and from the lunch. And before you knew it, there was two hours out of the day or showing up at work 20 minutes late. Because you wanna read the,

you know, in in the earlier days you'd read a printed newspaper, he wouldn't do stuff like that or closing off lots of invitations that just take away from the hours that you can devote to your job. And you look at Bill Gates or Mark Zuckerberg or any of the really successful technology leaders. They are very good about shutting out the things that don't matter for the thing that

they all right? Yeah, yeah, I think I remember, Layer. And so you're telling me they got rid of that? Someone point their assistance because they were scheduled to much right. They had

money. Bill Gates early on took the two TV tuner out of his television because he didn't want to get distracted by watching television channels and all he did wanted to do was watch educational videotape. So he took the radio out of his car dashboard because he didn't want to be distracted by radio chatter, including fine programs like this. I suspect, um, on his way to and from the apple in Seattle.

So do you do that?

I try and shut out the rest of the world when I'm really concentrating on Absolutely. Yes, I I just don't think you can work very effectively much So when I was writing a book, for example, I tend to start working, you know, five in the morning and work until 7 30 without looking at television without checking email, without doing anyone without looking at my phone. Because at least in that pursuit, um, it waas it just took your mind away from the matter

at hand. Yeah, and there's so much to distract, you know, in any in any case. So let's talk about

people. Forget how few hours there are in the year. Um, once you eliminate asleep and eating,

but you have to sleep, correct what you advocate sleep.

I do advocates on and and recovery and fitness and health and good, you know, healthy diet and all that stuff.

So what else? Okay, so that's obsession. Focus. Persistence.

Uh, what we talked about delegating and trusting people, giving people a sense of purpose, having perpetuating a sense of discipline within any organized.

Give me example at Manchester United.

Well, um, one of the famous examples that matches the United is that there was an extremely good, if not going great plaque. Call Roy Keane, who was the captain of the club for many years, who questions that Alex's authority on one or two occasions. And after he did that the morning afterwards he was gone and David Beckham, when he began to get distracted by the siren call of celebrity who was immediately traded to Rail Madrid or other examples of players who did something silly. Or perhaps that, you know, there were a few who out drinking for for New Year's who were or for Christmas, who suspended for three games, even though a couple of them with the star players of the era and United's performance would suffer from the fact that they want. And

what would that do? I mean, that doesn't happen in Silicon Valley. I can't think how much more coddling they can do to these people on some level.

What depends? Um, I think, uh, every every businesses is different, but, um, if the high performing cos you won't see them tolerate a lack of performance for very long, I know certainly for us. We don't You want to give everybody a shot. You want to do everything you can to make somebody succeed, But then if they stray off the reservation or under perform, there's not gonna be a place for them in a high performing organization. Right on. Duh. I think that's life in any way organization that exceeds Thio desires to excel.

It's been interesting debate with the Amazon story about how tough a place it is to work. Did you? How did you find something like it didn't have to be a tough place to work or just demanding.

Well, I read. I read the story in The New York Times on dhe. If you had the choice between being a shareholder in the New York Times company and an Amazon, I know which one I would pick. And I thought it was a harsh un charitable story of one of America's great companies. And if you go into all of the great companies. It could be Google, Facebook, Intel, Oracle, Cisco, Microsoft, Amazon. At the peak of their glory. They're all hard, tough, uncompromising

places to look. So are so our banks and, you know, different places is interesting. Microsoft, for sure, had that reputation for a long time in which was celebrated, which was interesting. And then others Google, they they

hide it. Amazon should be a company that The New York Times and others celebrate the accomplishments off that company. That management team is just staggering.

So let's talk a little bit about some things that could go wrong. When you're a leader, what should you be able to change me? At one point, he had not. He was talking about not being charitable enough, being too tough, being too uncompromising.

And he also said he was much more emotional in his early years on yelling and screaming, didn't have didn't share enough compassion or empathy. I think early on with a CE, he was finding his own way. I think probably that's common in true of anybody in their twenties and thirties. It sisters you grow through, go through life, and Seymour examples of human behavior, you become more nuanced in your understanding. Others Thea other thing that he he was also keen to do was to, um, take advantage of changes as they developed and where they made sense for his club. So diets change the technology underneath the soccer pitches themselves changed training routines changed massively over those of the 40 or 50 years that he himself was coaching. So where it made it made sense. He was video analysis Majesty United, um, and then Excell. It wasn't really under his old umbrellas. Much clubs like United took great advantage of the spread of technology as well. Whether at first it was cable television and satellite now obviously mobile and social

network right, which they're making themselves popular as a global entity and a business. It's a global business. Now it's really I mean, I didn't realize it had been so small when he started, because it's this public company. Thanks family, right?

Thanks largely to the growth of video coverage, Father, rather than just television courage and the number of devices on, I often watch United Game's on myself,

which is interesting, all right. When we get back, we'll talk a little bit about you and your investing thoughts. You wrote a really terrific essay recently about private companies and the pitfalls and the benefits to being one and interesting enough feel girlie this week. Talked about that, too. He was more talking about valuations. I'm going to get to that and sort of where some of your theories are going forward and how. What, you think the key leadership principles are going forward these days. You can probably get anything you want on demand or wherever you want it. So why are you still taking trips to the post office in dealing with those limited hours and the hassle? Anything you can do with the post office, you can do right at your desk with stamps dot com by in print. Official U. S.

Postage for any package or letter using your own computer and printer. And unlike the post office stamp, stop calm never closes. Start avoiding the post office. Start doing the better things with your time, like playing soccer, for example. Right now, sign up for stamps dot com and use the promo code decode for this special offer. A four week trial plus $110 bonus offer, including postage and a digital scale. Go to stamps dot com, click on the microphone at the top of the page and type in decode. It's that simple. Go to stamps dot com and use the promo code decode and get started. Today we're here with Mike Moore.

It's famous venture capitalists, and we were talking about his book that he did with Alex Ferguson called Leading. It's about the attributes of a leader and what makes important lessons to be learned, which can be put anywhere in life. Um, let's talk about the lessons learned right now in Silicon Valley. You've been here an awful long time. Mike, you came here. What? You're 76. Is that writer? You at 80 and so talk a little bit about the change. You came here as a journalist. You're now a venture capitalist?

Yes. Um, I was a journalist. I would Time magazine for a few years and then left and started a, uh, um company. The little company that many years later, not thanks to me, but others became part of Dad Jones. And then in 1986 joined Sequoia Capital.

So talk about the changes that you see that are happening and what you think is important right now. How are you? How your urine. You've done decades of venture investing. The

biggest change is the way in which technology infuses so many more parts of the economy than it did when at least I right, got started and got my feet wet in the business where now investment diet was largely at that time. Semiconductor companies and computer systems companies and maybe

some destroyed right and then software

and a little bit of salt, right? But then the personal computer business came along and began to change everything. Now you look at where technology is and Web investors, the world technology, investors, the world over investing. And they now have a way to invest in retail in retailers and entertainment companies, information Cos. The advertising business, health care business, so many different logistics businesses, so many different businesses that we need financial service is, which is a very big emphasis

of, and you're in some very interesting company, like Karna, another

clown, er and stripe square and prosper and several others in China and in and in India. We would never in the early 19 eighties have dreamed in a 1,000,000 years that would be investing in all of these different segments. So that, without doubt, is the largest change.

The ubiquitous technology.

Yeah, and it's the fact that computing is no great insight is that computing has just got so much cheaper, particularly obviously with the proliferation of

smartphones. Absolutely. I mean, one of the things that I think about is it's a lot like electricity. We did. It was very what much thought of when it was invented, and then it becomes invisible, and now it's invisibly in every single thing. Um, it's interesting that you don't get up in the morning and say, Ah, the electrical grid. We do talk about technology more than we talk about. More important,

when both of us started various journeys in Silicon Valley, you would wake up in the morning and maybe see your alarm club. But you wouldn't see a divine that allowed you to go on an adventure along perhaps two million different journeys that you could dunk before you left your bed.

It was all phone calls to was all making phone calls from a stab from a landline phone, but rather than age ourselves. Mike, what do you think is important now? What do you What do you What are you looking at? You invest in so many different companies. And again, um, even the ones that are big or constantly under siege. They're constantly having to innovate even more when they get to a certain size. Companies like Google and others,

I've always bean very bad. And I'm certainly no soothsayer, um, about and everybody can talk about all these buzz free. It's about virtual reality or or a I or the Internet of things and all the buzz phrases or the importance of mobile. None of that means all that much to me. And we just try and find a business that sounds very interesting. That does something meaningful. And one of the reasons I'm so skittish about trying to predict anything is that some of the very best businesses ah, one's pursuing the most unlikely sorts of things that when you first hear about them, you think you're utterly implausible on DDE. One bright shining example of that in our portfolio today is Airbnb. When we first encountered a B and B, we never dreamed that this was a company that within our lifetime would be able to book Maur room nights in a single day than the entire Hilton Hotel chain wine. But here we are, just a few years after it was started by this incredibly able trio headed by Brian Chesky on ditz doing on it. And it's doing that.

But, you know, you asked about important themes. I think the other important, you're the big one of the very big themes today is the importance of China and not just a za domestic market. Right, Um, where we've operated Thanks. Tow Neil Shen and on others now for 13 or 14 years. But because the inter relationships that are growing up between these companies and the importance of the U. S. Market increasingly for Chinese companies and four U. S. Companies tohave a springboard in which to go on and prosecute their business

in China has been difficult, which has been

defeated, it's being difficult. But it is something that, if you approach it correctly, is eminently achievable. And I think we're going to see a lot more of that over the next 10. That's the That's the big second chance

and them coming. And then the Chinese companies coming here, which still hasn't happened, really is a large amount. It's small and a Chinese consumers

who live here. But there are some really good examples that I think are harbingers of things to come. D J. I is a drone drone company, and it is the leading drone company in the world. It gets the majority of its sales from the U. S. Market. I think most people, if they just opened the box of D. J I on dhe, took out One of these drones would say, Oh, this was built in Cupertino or Mountain View. It's built in Shenzhen, right? Right. And that's a company that is a global company for whom the U. S. Is the

most important. What about a company like jammy or or 10 cent? Um, different country, different

re of different reasons. I think they will go on and particularly shall may emulate the whywe strategy and probably go thio most other countries around the world Before they would think about coming thio us or the U. S or Canada Roll Europe and 10 Cent has been busy making investments in U. S. companies is that Foothold is an extremely well managed, very, very impressive company. Uh, but they have great global

ambitions. Right? So you're talking the advent of the Chinese companies dominating the way U S. Companies had have been doing

well there. Seven of the most of the 20 most valuable Internet companies in the world. Chinese. That isn't in 2030. That's in October 20 0

November 20 15. Absolutely. Um, how do you think the U. S West Western companies were faring? Then what are the challenges they face? You're in a lot of them. Look, take Google, for example. The I think

I don't think it's easy to cross boundaries for any company, whether it's a Chinese company coming to America or or or vice versa. The Chinese companies are probably better equipped to do it than the American companies. And it's not for the reason that most people point to which is regulation. There's a lot of regulation in America there if that doesn't help a Chinese company coming here. But the language barrier isn't as tricky for a Chinese company coming here is it is in the other direction. Many of theme anedge mint team of these Chinese companies have spent time at American universities and have lived in America and have a better sense and sense of feeling for America understanding of America than their counterparts do for China. Um, they also, um, have, ah, openness and willingness to learn about how they need to modify their company's products for success here. I think the American companies still have less of the leaders of these companies, unfortunately, have less of an inclination to go to China. I say we know nothing about your country. We're here to learn. We

can't exactly what would be the only one? I'm good at speaking Chinese.

And yeah, there are a few. Yeah, but I think he's the example that proves the rule, right. And, uh, most assumed that China is a slightly larger version of Germany on what works in Germany can. Therefore, working child doesn't work quite right. But, um, the Chinese have a set of rules, and they're quite clear about those. But they're also very clear as well, in our opinion that they welcome things that will make life better for this.

So I wanna finish up talking about an essay you did very quickly about private companies and, ah, the downfalls of them. And the pluses you used contrast Adele with Theranos. Ah, obviously Theranos is in the news due to their issues around their blood testing equipment. Dale just bought E m. C. Um, how do you How do you look? Talk a little bit of what you were trying to get to. There I was.

This was, ah, piece that appeared in the Financial Times recently, and the only point I was trying to make waas the um and private operating in a private as a private company offers a whole bunch of benefits for the operator that could be put to good use. And Google and Facebook famously operated, I think make great success made great use of being private, too. Grow their businesses quickly recruit lots of people with favorably priced stock options. Be able to hide from which

a lot of unicorns

are doing now the scrutiny of competitors in particular, who didn't realize how good their business waas and to operate in fairly stealthy fashion, I think, and to sort of learned stutter in the private market before speaking fluently in the public. However off, which is really healthy. However, I think there are a number, not a number of companies who operate in the private market, that it just deluding themselves and are using the shadows and privacy that, being private offers to not disclose very much about what they're doing, particularly to investors to camouflage reality. To camouflage the truth, Um, and to deceive themselves off reality. And that's calm, pounded by the way in which some of them have raised cap

right. It's easy money. No. Well, they get a lot of funding.

It actually is the terms now, some of them not all of them, but some of them. And, you know, I call these companies the subprime unit range. Yeah, Actually, the money might have come easily, but they'll eventually discover it's not easy money. It's extremely painful because what they have done is tthe e private equivalent of taking on a huge amount of some subprime obligations, and these companies have raised capital at very sport evaluations. But the capital is not equity capital, its debt in everything but legal name, and will be very painful when those come. If those companies don't deliver on their promises.

Are you worried right now about that. That's where they're too many

of those there is. No, I'm not worried about about it, because I think any company and board of directors that assumes that sort of those sorts of punitive financing terms deserve whatever. God bless them if they sail through it. And so you see, that's terrific. That's wonderful for them. But if they eventually found her and have to pay the piper, they only have to look in the mirror to see who was to blame.

Last question. You step back a little bit from Sequoia due to an illness. You seem very passionate right now. Speaking of passion, it is being a leadership quality. Have you? How do you feel about your right now? I'm I'm

an individual contributor. Yeah, that's a, um, a member of the team and very involved.

I like

your humility might with a whole bunch of company s, including some very young companies. Like, um, you mentioned climber and suite, which is very exciting or stripe on insta card right here in San Francisco. The young private companies, all three of them run by fantastic founding teams. Just fantastic. So, um and this is an exciting time to be investing in technology. And I think the, you know, we all think life is Thean Vestments are coming fast and furious. But I think the next 10 15 years the developments are going to be even faster than they're

being in the last. How do you keep up your leadership qualities?

Well, I'm I'm in the comfortable position of not

having to be a leader. Well, you are.

I am just a mere

follower. I see. I don't think that's true at all. But in terms of keeping that that the same thing the persistence, the passion, the the, um, the obsession Do you still think you're like that?

Uh, it's very invigorating to be to do two things. One to test yourself to see if you can still perform at a high level. On the second is to be around young people brimming with ideas and vigor and energy about doing something that really matters.

So, Sir Michael thank you. Like calling someone else, sir, if you like what you heard and don't want to wait until next week, be sure to check out our other show. Recode replay. We have scores of more red share interviews from all our events with guests like Google's Andy Rubin and UM it single current president Barack Obama and presidential hopeful Hillary Clinton. All this and more at recode dot net slash replay. Also, if you haven't kept up with this show, be sure to check out previous episodes of re code Decode, including fantastic interviews with a panoply of people such as famous venture capitalists Mark Andriessen, media mogul Arianna Huffington and Lena Dunham, and Jenni Konner, who made a little show called Girls All on recode dot net slash decode. Today's too embarrassed to ask is brought to you by audible dot com,

which has more than 180,000 audiobooks and spoken word audio products. Get a free audiobook of your choice at audible dot com slash decode. Now let's talk a little bit with our good friend and fellow geek Lauren Good of the Verge, Lauren. I'm hang gree uh, angry and hungry and we're gonna be talking about food delivery service. Is that which I am a great user and I love her of them. You know, one thing I really like about talking about food tech, Yeah. Is that food unlike some other areas, attack is actually something that you really you really need. Yeah, like in the Maslow's hierarchy of Needs Pyramid, he probably don't. You really made it so delivered for almost no money paid for by B.

C's, but no, but it's it's kind of like, you know, some people would probably say, Oh, I need my iPhone more whatever. In reality, everybody needs food, They dio. They do not quite as much as I, but still. So let's talk about some of the food delivery service is I do use them all, some rather familiar, and you sit there in three buckets. That's the way I look at them.

They're our grocery delivery service is and other kinds of item, you know, itemized delivery. You're looking at companies like Insta Card or Postmates, least here in the States. And then there's the hot food on demand delivery segment, where you look at companies like Seamless and Grubhub, which deliver from restaurant door Dasha. They go. You know, a lot of restaurants don't necessarily have the most sophisticated systems in place to handle this or don't have the staff to handle delivery, so they'll use these service is, and then you could just use a nap. Even companies like Uber are getting into this right. And then there's the meal kit. Deliveries.

Yeah, but in the hot who delivered? There's also like Sprig and Montreal. Oh, yeah, there's a lot of times it's not a restaurant. They don't exist. Is that restaurant in something? You are absolutely correct. In some cases, like spray, they actually have their own kitchen where they make everything fresh. Ah, and then their meal kits. So they're things like Hello, fresh and among trees.

Getting into this and blue apron is one of the best known ones where they deliver you the ingredients that you need and promise that we'll be really fast for you to cook your own meals in little bags. You do? Yeah, let the little bags and you do your own cooking. That's a good way to put it. Yes, really. Have you used them? Um, I have. I think it's cooking for idiots. Um, I use a lot more than the meal service is because they're so incredibly inexpensive. And I like taking money from venture capitalists because it's ridiculous. The prices, like it's kind of strange You know,

I you know, I always joke San Francisco is assisted living for millennials. So I feel like I'm benefiting from Yeah, I like to joke that it sort of infantilizing people. Yeah, they're doing all the things like their laundry in their car, washing in their food delivery in there like that. You know, your mom was done. You're also the New York City is like this all the time. That's the only city. New York City. New York City has always been a city of convenience, though. Yeah, and the truth is,

is that if you don't want to pay $10 for on top of something for delivery, you could just walk to the street corner and that it's not a lot of cities or metropolitan areas on break. Yes. All right. So what? The business models of these things they're usually charging some type of delivery fee plus tip or some type of percentage is added to the order for something. Sometimes they're building. Other service is on top of service is me. For example, Blue apron just launched a wine service. So that's their attempt to sell wine addition to the meal kits and a lot of times this is just all about customer acquisition, getting new customers to try your stuff and then recurring revenue. If you're doing a subscription service, something like the Hulk Lavery service or yeah, then they know they have you for certain number of cycles. And so a lot of companies like that idea because whether they're doing something like clothing in a box or doggie trees or something that you know,

they have a certain amount of recurring revenue. I think ultimately this is all kind of a long term data play about the customers. I mean, if you look at a company like Amazon and you say, why are they getting so deep into fresh delivery? Service is well, it helps create a great customer profile when you know what somebody's eating when they're eating it. And you can kind of, you know, figure out why they're eating some writing, a special occasion or a certain time of day Fairy is plot by Amazon as usual. Well, on this cos they just they want a lot of customer data, but where there's so many, well, there's so many of these things,

I mean, that's the thing you kind of worry about their business models because there's seem like there's a bento box one. There's a they're, like, crazy. You do wonder about the niche one. Sometimes I think there are so many because everyone's trying to own the delivery game on, and I think it sort of goes back to what we said earlier that food is. It's an actual need. It's something that everybody needs a T least a few times a day if you're lucky enough. And so I think that, you know, whatever company can figure out the really sort of complex network of farming and food distribution and food shipment and stuff like that, then I think that you actually have a chance of solving Cem really serious issues. I'm nothing every company is gonna do. That is,

if you know, if you're just like the hot dogs on demand service, right and and who knows how long something like that would last. But I think that if you're really if you can really sort of crack this, not there are great implications for how we can sell food, but right now it feels like they only want to serve me a balsamic pork chop. Really? I mean, it was just right, you know, local organics. It's local organic center table can afford it. Anything. They are quite low in price, comparatively. So an uber is getting into it.

And Google and Nam is the rest of them all of Marguerite s. So what's uber doing? Because they know they're moving. They could move anything around. They're moving people around, but why not move? You know, balsamic pork chops. Uber is starting out slow there and about 1/2 a dozen cities right now. They launched a few months ago. Um, they actually launched in San Francisco back in August. And, um, they're saying that basically, within 10 minutes of your order,

you know, you'll get a meal that ranges in price from a dish Walt dollars plus the $3 service fee. Um, and they'll deliver it to you like pretty much on demands. Uh, so it's sort of it's sort of what Sprague and some other services are doing, but they're rubber, right? So they already have this global network drive 10 minutes a day in the back of the car. How long? How long to usually refer number you know. I know, but they have to go get the food and cooking. Oh, I see what you're saying. Yeah,

I think Travis say when he was little bear on this recently. There, they've got it in the cool in the cooler. There are actually like smearing peanut butter and jelly and bread in the backseat or saying it's not like Travis is gonna roll up in a blue apron. Yeah, that would be, but yeah, I think that they've got it, you know, they've got it in right. That's what the bento box saying. They have a hot and cold coolers and then they assemble your bento box in seconds and they drive around in circles. What's that one called Vento? Just bento bento. Yeah, So it's like it's a cardboard thing and you stick little bentos the differently if you want Adam whatever you want and what some are hot and super cold,

and then they figure out what most people want. And they'll have all the hot sand hot because then you could, like get six different kinds and they have them all there, and they just assemble your box so it looks like it's totally personalized Wow. Personalized bento bottle An alliance. I don't think I think we've just hit Peak San Francis. I know at this moment. Jacqueline Rico's radio. Yes, I think Jason Calacanis showed it to me. Okay. Um, So what's Amazon doing? Amazon has a couple different. Does they deliver everything? Fires,

cooking, no pun intended about buying toilet paper burns at my house before, you know, like Amazon seems to know. And we need one of those dash buttons. You serious? Like I order something in three days. Seconds later. It's Yeah, there. I know Amazon is pretty amazing. I just ordered something for a family member and had it shipped in its arriving. And she's like, How is this happening so quickly? You must be paying a fortune for FedEx. I'm like,

No, it's Amazon Prime. But any other case? Uh, so what is the Amazon doing? Alright. They launched a couple years ago. They launched something called because it called Prime fresh. And they've been experimenting for awhile with grocery delivery. Service is, um but they had this, like create. Originally, they had this crazy to $199 annual fee. Well, they're trying to get people to use it.

It's grocery deliveries, right? Um but they've because they've just been sort of extending the free trial of it for so long that in participating cities, it's still sort of in this this beta thing. So that's fresh groceries. Then in September, they launched food delivery through its prime now app, which is one hour delivery at. But that's only happening in Seattle right now. All right, so it's still early days for Amazon, even though they've been toying with this for a while. The ideas that they want to sort of get in both on the grocery delivery side, but also the instant on the man's a great hot food to, like, take out essentially and,

you know, hard goods. The kind of things that you get at the store. Yeah, Amazon is sort of painting this picture of just owning your life. Yeah, from the moment you wake up until you know, for the things I guess for you would be like from food to toilet paper, huh? Yes, that's true. Interesting. Very funny. Very funny. So, hee,

I actually have a question for you. Sure. So, yes. Your final question. Been covering tech for a while. You go ahead. Go ahead. Yeah. And you were around during the Yes, you know dot Bam, Boom and Webb Band have been And so you And then there was cosmo dot com. Cosmo. Yeah. Yeah, I said they were one assault away from the end of their business was like,

they would like a crazy person would deliver a Snickers bar to you. Oh, really? Yeah. So they're sort of facing some of the charges facing. Yeah, I just this weird. It's just was weird. Yeah, like it was a strange service, huh? Well, I mean, a lot of those imploded. Yeah, they did.

You know, we was interesting. I had Mike Moritz, and he was Mr Webb van, um He had the big investment Webb band, and we laughed about it. But, you know, the conceptual idea was correct. The idea of getting no, have not having go to stores and everything. It's ridiculous to go to a store and hunt and grab things. It just doesn't make any sense. It's so inefficient from energy. Point of view from a time point of view. And the delivery stuff is smart.

Um, So I think weapon was much too early, and it was people didn't have smartphones again. It was It's all based around a smartphone, I think. And so I think, conceptually the idea was correct. It wasn't executed correctly back then because we think timing is everything I do. I'm really am intrigued by a lot of these. Service is at the same time. There's too many of them. They're too low priced. They are dying for biz. I'm suddenly getting inundated by all the delivery. Service is use me. Use me,

use me and you know I use one now, I guess, um, Haiti's Montreal more than others happened like the food. But if I don't use it a lot, and I think that's the question is how How long convene sees fund these things? That said, the ones like insta cart or caviar words from restaurants makes total sense. To me. It's like open table or, you know, you know, I mean, it's just these these companies can't. These individual businesses can't do delivery as well as they should, and it's a great way to do delivery.

Do you think that some of them will get absorbed eventually? I think a lot of will just go away. We'll just go. Yeah, and then the ones that with the preparing meals I don't think it's very skilled. I'm sorry. I don't think it's wise that because just isn't that many people want to do that. Like, you know, I think you you either get your groceries delivered, which I think is important or you have your meal delivered. But the in between is on again. Assisted living for millennials. I think it works in San Francisco and very few other places. Do you think that some of these companies have the potential to actually create a shift in the way that we eat and consume things and not just here, but I mean it?

No bigger? No. I think it's just not know stores and the Gammas on. Yes, I think what Amazon's doing around delivering goods and service is, and then the others that are following your super important I don't think we'll have the grocery store is actually pretty bizarre. It's bizarre because it's it's sort of I what is it? It creates this sort of hunter gatherers dynamic, but it's it's all just false when you the food waste of time and money and marketing and putting on the shelves. It doesn't make any sense, like displaying it right, Like there's so many other good ways of getting it in. One of the things we have, the head of Wal Mart to code two years ago, maybe he was talking about that. Wal Mart's not gonna have big store someday.

Like you have a 10,000 square foot storm, maybe to look at certain things. Some things you do want to look at. You want to see televisions bring to mind something you want to physically see. But but most things, you know, serial, you don't need to see. So you have you still have distribution centers? Wouldn't necessarily has it. Then who controls that retails? There's gonna be a self driving car. It's gonna just come to your house and put it in your garage for you. Wow. So in the future, you will have a self driving car that drives to a distribution warehouse,

skips the whole retail store process. Yeah, picks up something and then brings it to you. Yeah, and you have not communicated with a single human nature in this process because you summoned it through your wearable or your smartphone or some type of Internet platform in your home. And then So how does how does the pricing work for something like that? Then when you cut some of the middlemen out, you could have lower prices. You know, if you don't need get your car anymore, for example, you need to pay for the gas station on. Repeat for maintenance. You have money for other things. You're wasting money on all kinds of things. It doesn't work in every place,

but it does work in a lot of places. Okay. And who do you think's gonna own that? Ah, Amazon Google. Um, you were home. What about you mentioned caviar before, right? Yeah. They're square. Yeah. Yeah, that's what you think. Like Jack Forrester was CEO of that company to he should be CEO of every company in Silicon Valley. And that is my last word.

All right, Lauren. Good. He should come to my house to make me dinner. By the way, Jack, get over. Quick, Quick, quick. I thought you wanted me to Come on. No. Yes. You should just get it fixed. Your four kids Well, you know,

I'm still waiting I'm still waiting by the door. All right. Thanks, Lauren. Good. See you next week. Thanks for listening. This has been another episode of re code decode. Next week I'm off to Beijing, China for the 2015 10 cent media conference. But don't worry, we'll have a great interview for you this time with Box Co founder and CEO Aaron Levie. Trust me, you won't want to miss it. Thanks a lot.

This has been re code decode hosted by Cara Swisher, powered by digital media for more hard hitting Interviews with insiders from the worlds of tech, media and politics Subscribe to recode replay on iTunes featuring candid conversations with leading voices like a ol CEO Tim Armstrong. Goldman Sachs is C i o Marty Chavez, the team behind the hit TV show Empire Shark Tank Investor Mark Cuban and presidential candidate Hillary Clinton.