The Exchanges

Q is a compliance management company. I think we have some different perspectives on what we like. Give me a payroll mechanism and I'll be all over you. Um, why am I single? So strange. Um, anyway, uh, tell me final one for you. You've done so many incredible things. You have so many incredible years ahead of you. I'm sure. What do you want the legacy of Emil to be?

A Man, if I could have a fraction of, Of the impact that Bill Campbell had on 20 other people. All right. That's my rule of thinking. I'm kind of a rule of 20 to 20 20 B.C., right? Which is, you know, he probably mentored about 20 people, including the ones we mentioned, and made such an impact on all of us. And even the people, um, you know, there's a lot of people on the list who are doing great things, you know, and not a lot of people know about. If I could do the same after all experience I've had and have people go when they do You know, you're 20 VC five years from now, if you're still doing it and be like, wow, you'll help me do this and help me grow in this company. I built this company and I made my impression on the world. Sort of that would be something I'd be proud of. Second, I went to work at the White House in oh nine at the Defense Department and I was, uh, uh, you know, worked for Secretary Gates. I spent a lot of time in Afghanistan, Iraq, Guantanamo Bay, Pakistan. So I did a lot of stuff where I got to see the real world. Not what the bubble in Silicon Valley or Soho in London is, um, and bringing a little bit of public service ethic back into business, not ESG, but just, it drives me crazy when the tech companies won't support like the Defense Department software, like we won't rent to our cloud, things like that. Um, those notions of being patriotic and supp…

AI assessment note: “if I could have a fraction of, Of the impact that Bill Campbell had”

Q How did you get Travis over the line on the flip side? That seems like a tough thing to do as well.

A Um, it, Travis and I worked together so well, the two, the thing that we had lots of discussion about was M&A. Should we buy Lyft, should we not buy Lyft? Should we merge with Didi? Should we not buy Didi? Should we sell, buy Grab, all the different rod sharing companies around the world? I was always for it before he was for it. But the China thing was so unique, Harry. No, think about what consumer tech companies operate in China. Zero. There was, there's enterprise tech like Hewlett Packard and IBM and all those guys, but no one else had done that. And we didn't ask for permission. We just did it. We showed up in, you know, Hangzhou and in Hunan province, and we just launched Uber. So there was some amount of risk to that, that yeah, if you don't sell it, it might just not exist one day, given sort of the government roles. And we were spending A hundred million dollars a month competing there. Cause it's remember it's, this is the biggest market in the world. Um, 1.3 billion people, and we were going to win. And I just raised three and a half billion from the Saudis. And so we were going to win. So the combo of those things made the industrial. And then when I handed the deal on a platter, I was like, this is done. This doesn't, you know, let me start. This is finished. 45 days from beginning to end. He agreed. That's how I got him over there.

AI assessment note: “when I handed the deal on a platter, I was like, this is done.”

Q Okay. Can I just ask a question on that? Do you let your, um, not opponent, but do you let the person on the other side of the table know the depth of information that you have, or do you want to keep it in wealth of reserve?

A The framework number two is the less information you give and the more you get the better. Um, and so none of this is sinister. It's just, If they haven't done the research, I'm not going to do it for them on me, but, but if I've done the research and it's just, this is Google stuff, right? I'm not, you know, this is nothing nefarious. This is just trying to put a picture around someone. If you had to write a chapter on Harry's life, I want to be able to write it before I get in the room with you. Um, and so whether I told you I wrote that or not, uh, you know, is my advantage to, to, to keep if I can do that. Um, and, and information is power and people don't, don't, Don't realize that enough, um, that the more you learn, the better you're going to be at these things, even about your own company.

AI assessment note: “the less information you give and the more you get the better”

Q What would it take for you to go full-time in-house again? That was from Jared.

A Oof. Um, being invited to be the CEO of Uber. I don't know. I don't know if you read the other day that, uh, someone's mentioned to Elon that I, I should be up for the CEO of Twitter. Some job where, um, It's an important global mission that, um, that I really could dig into, not about the money, but about the global mission. Twitter, as much as I hate it, and it's a hellscape and all those things, there's some, there's a globally important asset and someone has to do something with it. And I'm glad Elon's doing what he's doing. I think Uber could be that asset. I think there's probably three or four other things out there that, um, I'd have to I have to find so that I can actually choose and say, I'm doing this again.

AI assessment note: “Some job where, um, It's an important global mission that, um, that I really”

Q this kind of value reshuffling of realizing that actually, you know, Twilio is worth thirteen billion at four and a half billion of ARR. Well, fuck me, that's hard to build a deck of corn. So my question to you is like, as founders, like approaching these down rounds, what, what advice would you have for them specifically? Because it is very, not dehumanizing, but disincentivizing for teams. It's tough.

A It's super tough. Um, and that's why I say there's the time before down rounds is structured rounds, same valuation, higher lick prefs, you know, more protection for the investors optically. It's, it's, it's sort of close to what you did before the same. Um, but the investor has better downside protection essentially, right? And employees don't fully get that, but at least it doesn't feel like a bigger loss of momentum as a down round. Um, the problem with, The structuring rounds is that it's hard to do the round after the structuring round, because once that investor has protection, well, the next one wants it, and the next one wants it. So your two x lick prep starts to eat the whole cap table for every, you know, investor down the line.

AI assessment note: “there's the time before down rounds is structured rounds, same valuation, higher lick prefs”

Q with that, and I hope it's okay, but with the kind of downside protection immigrant mindset that I have the same, my family lost our money when we were younger, and I have the same, I worry that it actually makes me not so good investing because you sometimes are too downside protectionist and not upside. Do you ever think about that, and how do you prevent that from happening?

A You know, I've got the opposite. I'm like, if I lose this, I'm gonna be okay. Now, now, to be fair, I, I had the Uber situation on top of that, so now I've a lot more cushion. Um, but, but, but, you know, it didn't, It didn't make me do that. Actually, in some ways it made me invest in people who had similar chips on their shoulder that I did in that, like they were going to win no matter what, no matter what business and so on that, which goes to an investment philosophy of how much do you bet on people versus ideas? Um, and in what order do you bet? How do you weight them? Right?

AI assessment note: “You know, I've got the opposite. I'm like, if I lose this, I'm gonna be okay.”

Q Can I ask, what are the biggest mistakes that you see people make in deal making? Where you're like, ah, great.

A Um, I used to joke that, that I could read upside down, so leaving papers on their side that I could read. I'm joking, but I'm joking on that. Um, no, the biggest mistakes people make, the emotion thing is, is it just a massive tell? Because it is, And this is why being a shock absorber is better, even if you are emotion, try not to show it, um, or let it impact your decision making. Um, the emotion thing, and then there is this, Sort of eagerness you detect in people. Where is it? It is the leverage point. It's like, do they think they have leverage? And you were talking about it before, but they show it in different ways. It could be that they think you don't have leverage and that gives them leverage, or it could be that they actually have leverage and they know they have it and they're going to use it or they don't know they haven't going to use it. So which of those combos is it, um, is something I look out for for the second I walk in a room who stands up to shake my hand versus who sits down. Who offers coffee? Who pours it? Who set up the meeting on whose turf? You know, all the signals will show you or indicate to you who has leverage and paying attention to those things. It's sort of like a CA agent paying attention to a subject. And if you do that over time, you do your 10,000 hours negotiation to kind of, it becomes sort of innate.

AI assessment note: “the biggest mistakes people make, the emotion thing is, is it just a massive tell”

Q hated me before, they'll hate me again. And then on the flip side, when times are really bad, young ones really feel it, the emotion really takes over. Older ones, again, they have children often, they're aware that their children could get sick. That is much worse than my head of sales leaving or something happening, and they have this temperament that's much more calm. Do you agree with that?

A I think it's a fair comeback, but I don't, look, and maybe the difference is this, hyper growth versus non-hyper growth, and by non-hyper growth, I mean great growth, like venture backable growth, but hyper growth, what Uber, Airbnb experienced, that kind of situation, we grew faster than any company in the world, both geographically And revenue wise, including Google. I just didn't think, I just don't think it was humanly possible to do that without that kind of time in your life for a company that's, that's, that has an industry with doesn't permit that kind of growth. I think you're probably right, but, but there's different times for different, for different kinds of companies. If you're building software, that's like, you know, going to be a better database and it's not hyper growth. Sure, I mean, I may agree with you, Harry, that like somebody's more mature in the highs and lows when they lose a customer contract or not, that that's better, but, but in some of this hyper-growth stuff, it's a different ballgame.

AI assessment note: “I think you're probably right, but there's different times for different kinds of companies.”

Q When do you think that is? Is that like 500 people to, like, that's the turning point? 200? A thousand?

A It's the right, for, you know, we went from 250 people to 20,000 in three years. So you're like, I don't know when we were at 500 or a thousand somewhere in there, but, but it was so, it was so extraordinary. Probably, probably, just to give you an answer, just so you have an answer, Probably no later than 5000 employees, because what happens at that point is you have, you have no names for a while, but at that point, if you're not training managers on how to manage, having plans about how people get promoted and all the, all the bureaucratic things that you hate as an entrepreneur, but you're that big, you know, you're going to make mistakes.

AI assessment note: “Probably no later than 5000 employees, because what happens at that point is”

Q So few people actually got to be coached by Bill Campbell. I think a lot of people talk about him, but so few people got the experience that you did. When you think about that time, are there big takeaways from you of how it impacted you and your mindset?

A You know, it's, um, they call them the coach, the trillion dollar coach, because he would, as you know, coach, um, Steve Jobs, who no one in the world thought was coachable, and then he would coach, uh, Larry Page and Eric Schmidt and, and Sergey at Google on two of the most important companies. And he'd do it at the same time when they were both competing, but he was so good that both of them were okay with that. I mean, think about sort of the character of this man. So he would give you these leadership lessons, less business lessons, um, and being able to be in that, to learn that early, what was, you know, how to do things. 20 years later. So you're fast forwarding your own future, um, was an amazing asset. To have, and so I tried to do that today with my own 20 entrepreneurs. I talked to it to at least, you know, do some part of what he did for me, and it's an incredible thing to have a coach early on in your career who cares, who has wisdom, um, and who has that kind of experience.

AI assessment note: “he would give you these leadership lessons, less business lessons”

Q So few people actually got to be coached by Bill Campbell. I think a lot of people talk about him, but so few people got the experience that you did. When you think about that time, are there big takeaways from you of how it impacted you and your mindset?

A You know, it's, um, they call them the coach, the trillion dollar coach, because he would, as you know, coach, um, Steve Jobs, who no one in the world thought was coachable, and then he would coach, uh, Larry Page and Eric Schmidt and, and Sergey at Google on two of the most important companies. And he'd do it at the same time when they were both competing, but he was so good that both of them were okay with that. I mean, think about sort of the character of this man. So he would give you these leadership lessons, less business lessons, um, and being able to be in that, to learn that early, what was, you know, how to do things. 20 years later. So you're fast forwarding your own future, um, was an amazing asset. To have, and so I tried to do that today with my own 20 entrepreneurs. I talked to it to at least, you know, do some part of what he did for me, and it's an incredible thing to have a coach early on in your career who cares, who has wisdom, um, and who has that kind of experience.

AI assessment note: “I tried to do that today with my own 20 entrepreneurs”

Q and we actually have to thank Raph at GoPuff for this one, but I'm so excited to make it happen. I want to start with a little bit of context. So we see kind of The OG of negotiations and deal making today in Emil. But just walk me through, like, how did you make your way first into tech, and then into investing? What were those two entry points?

A Yeah. Uh, so I went, um, to college and graduated in 1994, which if you remember the time there, that was the very beginning of the internet businesses starting to come out. And so in my same class at Harvard, um, Ahadi Partovi, Ali Partovi, David Wyden from Coastal Ventures, Alfred Land, Tony Hsieh, I mean, all of us graduated the same year. And so all of us Sort of decided, Hey, well, this thing is happening in the economy. We go do an investment banking job, a consulting job, or figure out what this tech thing was all about. So, um, I moved to California. I went to, uh, unfortunately Stanford law school, but I, at least I was in the middle of what was happening in the Silicon Valley. And then Hadi, uh, Partovi, if you know who runs code.org now, um, was co-founding a company called tell me networks. And Ali Partovi was founding, um, the internet link exchange with Alfred Lin and Tony Shea. And so I was working at both. I was kind of working at Tell Me, advising at both, and so it was at the very beginnings of the new internet entrepreneurs who were feeling around for something important in the internet in the 1994 through 1998. Um, so that's how I started.

AI assessment note: “so that's how I started.”

Q Can I ask, what are the biggest mistakes that you see people make in deal making? Where you're like, ah, great.

A Um, I used to joke that, that I could read upside down, so leaving papers on their side that I could read. I'm joking, but I'm joking on that. Um, no, the biggest mistakes people make, the emotion thing is, is it just a massive tell? Because it is, And this is why being a shock absorber is better, even if you are emotion, try not to show it, um, or let it impact your decision making. Um, the emotion thing, and then there is this, Sort of eagerness you detect in people. Where is it? It is the leverage point. It's like, do they think they have leverage? And you were talking about it before, but they show it in different ways. It could be that they think you don't have leverage and that gives them leverage, or it could be that they actually have leverage and they know they have it and they're going to use it or they don't know they haven't going to use it. So which of those combos is it, um, is something I look out for for the second I walk in a room who stands up to shake my hand versus who sits down. Who offers coffee? Who pours it? Who set up the meeting on whose turf? You know, all the signals will show you or indicate to you who has leverage and paying attention to those things. It's sort of like a CA agent paying attention to a subject. And if you do that over time, you do your 10,000 hours negotiation to kind of, it becomes sort of innate.

AI assessment note: “the biggest mistakes people make, the emotion thing is, is it just a massive tell?”

Q He then calls you, tells you, And you go punch a wall or a punch back there. How do you respond to that?

A You know, If I had been there, and so I'd gotten sort of tossed the week before, and it was purposeful because I'm a lawyer. I knew all the investors, all the investors wanted us to stay at that late stage because the investors who invested at forty billion, they just weren't, they weren't looking for it to stay at forty billion like where it is today. They were looking for it to trouble, triple, quadruple. And so we'd made a lot of promises, so they wanted Travis and I stay. So I was an impediment to benchmarks Strategy here. I was a lawyer. I was in a boardroom, whatever. So I was out on whatever technicality they can find some expense report that someone else on my team submitted six years before to my assistant that I never saw total BS.

AI assessment note: “If I had been there, and so I'd gotten sort of tossed the week before”

Q He then calls you, tells you, And you go punch a wall or a punch back there. How do you respond to that?

A You know, If I had been there, and so I'd gotten sort of tossed the week before, and it was purposeful because I'm a lawyer. I knew all the investors, all the investors wanted us to stay at that late stage because the investors who invested at forty billion, they just weren't, they weren't looking for it to stay at forty billion like where it is today. They were looking for it to trouble, triple, quadruple. And so we'd made a lot of promises, so they wanted Travis and I stay. So I was an impediment to benchmarks Strategy here. I was a lawyer. I was in a boardroom, whatever. So I was out on whatever technicality they can find some expense report that someone else on my team submitted six years before to my assistant that I never saw total BS.

AI assessment note: “I was an impediment to benchmarks Strategy here”