The Exchanges

Q Yeah, unbelievable there. Um, okay, totally get you. Can you take me to the moment where you said in your head, yeah, I'm gonna do benchmark. Was it a dinner? Was it a coffee? Was it a war? When did you go?

A Yeah, I think I think I said you had a benchmark when I was 22 entering the industry, honestly. You know, like, you enter the industry, you read e-boys, I'm reading all of Bill Gurley's blog posts, like, It is a mythical place, and it is one that, it's one, like, you enter the industry as, like, a young investor, and you think, if I really work my ass off, and I get pretty lucky, maybe one day I'll be able to compete for a seat there. So when it, when it comes true, and, and they, you know, give you the envelope with the offer in it, it's, I don't know, it's almost like a, like a childhood fantasy of, like, joining the Yankees or, or something. Like, it's, it's, it's super surreal. So, obviously, the people matter most, and that was really important during the recruiting process was, I felt unbelievable alignment, and just really a level of closeness with, Peter, Eric, and Chaitin, um, but beyond that, I think the firm itself, it's just one of these mythical seats that, that, that you dream about from the, the day that you enter the asset class.

AI assessment note: “I think I said you had a benchmark when I was 22 entering the industry”

Q Penultimate one. Are you ready to lose all of your friends in your new partnership? Who's the best picker in benchmark?

A I think the, I, I'll go with, like, a data, I'll do a data-driven one, which I think, like, I think just Peter's, I think, I mean, honestly, I think Eric is the most underrated picker. Um, I think when you look at just some of the, like, he's just done some, like, really low-key things that have ended up being, like, unbelievable. Like, he'll have Cerebris, which, you know, will, will IPO at some point in the future that's gonna be an unbelievable company. He has, like, a lot of these, like, sneaky, absolute bangers. But I think if you go back and look at just, like, okay, a percent of Series A's that ended up being generational companies, um, I think, I think, you know, Pete, I mean, Peter also has the advantage of being in the game for, for twenty-plus years, but it's gotta be Peter.

AI assessment note: “it's gotta be Peter.”

Q Abby, you'll regret joining this show very quickly. Six months time. Will the stock price be above or below where it is today? I'll give you the over or the under.

A I would probably just because of the retail mania, um, around, around the stock in particular, I would personally probably take the under in six months, not because I don't think that the company is going to be valued extremely well. And I have a couple of funny stories on this, but I think that, you know, four percent float, um, call options coming online. There's just so many like, like engineered things that are going to make the stock price go up over the next month. Including some of this index inclusion where there's more forced buying. It's just, there's no shares available. There's a lot of forced buying. There's a lot of retail activity. It's going to be popular for being, for people to be buying call options on this. Um, so I think it's going to still be worth a ton. Like I still think it's going to trade really well, but if I had to go over under, I'd go under from, from six months from now.

AI assessment note: “I would personally probably take the under in six months”

Q weekly basis, and I've repeated it to my team many, many times. Before we dive into Benchmark, you've worked with some of the best from Peter Thiel, obviously at Founders Fund, Mary Meeker at Bond, Mamoun Hamid, uh, one of my big bros at Kleiner Perkins. If I would ask you for your biggest takeaway from each, what would you say your biggest investing takeaway is from each of them?

A One of the things I really love about the asset class that, that we, that we practice our craft in is that there's so many different ways that you can be successful at it, and there's so many different strategies and frameworks that you can employ and still generate amazing returns. I think, um, and each of the people that you just mentioned have very, very different styles and very different ways of practicing their craft. I think if I was to lay out for Mary, for Peter and from a moon, um, kind of what I learned from them specifically, I think with Mary, she does such an incredible job. Everyone thinks of her as this quantitative investor. You know, she had the, her time as an equity researcher at Morgan Stanley during the.com. Um, bubble. And then she came to Kleiner Perkins, obviously, and everyone talks about these DCF models she creates and all the numbers that she does, but she's really the most qualitative investor that I've ever worked with. And it's a, it's a, probably a surprise to hear that, but what she does is she, she, it's almost like she's reading the matrix. Like she lays out all the sequential numbers historically for a company and then all the numbers going forward. And it's almost like she's, you know, reading the, the matrix code as it comes down and she's seeing what the company will become On an eight to 10 year time horizon when she sees what the number…

AI assessment note: “what I learned from them specifically, I think with Mary, she does such an incredible job”

Q Do you worry you need them to stay relevant? I agree with you on LPs. I agree on cash on cash, but just relevancy with founders and with community. Do you worry that you need them to stay relevant?

A I think it's a, it's a question that we need to constantly be asking ourselves. And I think if we ever find that our network access, the close relationships we have and the people we have access to is slipping, um, or, or, uh, or we're not getting access to the right people or the right network nodes. I think it's something that we always need to be sharp on and revisiting. Um, but I think if you, if you think about kind of like the cultural touchstone founders of today's AI era, like, is there anyone You know, more than Brett Taylor, who represents this wave of AI applications. He's like the, he's like the godfather of AI apps right now. And when you think about these like really cracked young teams in AI, you know, who do people look up, up to more than, than Brendan at Mercore and the, what, what they've done on the AI infrastructure side. And so at least thus far, even with our strategy, even with the trade-offs that mean that we can invest in every single good round, we've still been able to attract and partner with, um, and I think build really great relationships With a lot of the founders that people look up to in this AI wave. Um, and I think our network, uh, thus far has been, has been exceptional, but I do think it's a, it's an ongoing question because if, if all there is left is, is these billion dollar raises, um, in order to like build relationships with these peo…

AI assessment note: “I think it's a question that we need to constantly be asking ourselves.”

Q Incredible. But why? Because, like, dude, fucking B to B payments, like, you know, It's a big market. We got a lot more room to run. How do you think about that shift earlier? Are you nervous about making it? And what changes in what matters in your mind?

A Yeah, I'll be, I'll be vulnerable with you, Harry, and say that this was, um, when I was, when I was talking, this was, this was a dinner I was having with Eric, this year on our team. Um, and I was having a moment of insecurity when I was talking to him about, about just the, the, the role of, of being a GP of benchmark and saying like, Hey, you know, like I, I've mostly done growth. Um, and he was like, dude, like Bill Gurley was a public markets analyst before, before he came to benchmark. Like you certainly are not going to be the most, uh, you know, the most off the wall hire that benchmark has made. Um, that's actually more par for the course for benchmark. And I think also when you look at like, Who do you think are the amazing investors today? Um, I think they transcend stage. Like if you look at Pat Grady, does Pat Grady think of himself as a growth investor? Or is Pat Grady think of himself as just an amazing investor? Maybe he's too humble. He's a pretty humble guy. So maybe he doesn't think about himself as an amazing investor at all. But I look at what Pat does and I'm like, he finds incredible founders in investments that he thinks have an immense amount of upside and he goes and partners with those founders. And so I wouldn't say that I'm an amazing investor yet. I don't have the track record yet to say That, that I am, but like that is, that is my North Star, an…

AI assessment note: “I was having a moment of insecurity when I was talking to him”

Q on email, you said about how it sucks to be in a mega fund. Why does it suck to be in a mega fund, Ev? Because from the outside it looks pretty, from like building a firm, the idea of having mega fees, mega offices, Fiji water in unlimited supply, You know, and more EAs than you have investors. It seems pretty good. Can you help me out here, dude?

A Okay. So yeah, maybe I should caveat by saying all on a relative basis, these people definitely aren't going to the coal mines and, and, and laboring all day under, under the hot sun or something. But, um, yeah, I think, and I, I know, like I have so many friends at these funds and some of them are probably going to kill me for this, this part of the, this part of the conversation, but some, something that I always tell, um, I, I've mentored a lot of people that are either coming out of private equity or, or thinking about moving firms in venture growth. And one of the first things I say to them I just think about the day to day that, that, that I, I know exists in a lot of these mega funds. And if you think about it, if there's 50 investors, um, if you come in and you're like the 23rd partner at, at like, I don't know, like Iconic or like one of these places, uh, like what, what companies do you get to cover? And so they, like that, that's the first problem is like you end up getting like a, like a very small sliver of the overall market because so many people have already like, like laid claim and are the point person On the very best companies with the very best founders. And so you end up like being focused on this local maxima where you're like, okay, I have like 30 pretty good companies that I am the point person on the relationship. I also really need to do investments b…

AI assessment note: “you end up getting like a very small sliver of the overall market”

Q What do you think the biggest threat is to benchmark being successful in the next five years?

A I think that the thing that is most dangerous and the biggest risk to benchmark not being successful over the next two decades is stasis. I think that we need to be dynamic. We need to always be evolving with the asset class while staying true to our north stars. I am very much a believer that we don't have to, um, leave our north stars or bastardize our, our true north in order to continue to, um, be involved with the very, very best companies. But at the end of the day, being involved with the very, very best companies Is the currency by which we all live in this asset class. And that has to be the most important thing. And if there's ever a situation where we're letting our North stars or we're letting something else wag, you know, the tail wag the dog and the dog being, um, getting involved with the very, very best founders, but building the best companies. That's when we need to reevaluate our strategy and what we're doing.

AI assessment note: “biggest risk to benchmark not being successful over the next two decades is stasis.”

Q um, multiple bites at the Apple? I wrote down Apple bites. Um, when we look at benchmark over the years, you know, Fanton did Airtable Series C. I think Gecko was Series C. Langchain was a seed. To what extent will you push the partnership now? To expand the boundaries of what we call an A and what Benchmark does to do more broad bites at the cherry or apple.

A Yeah, I think historically, again, going back to those north stars that we talk about, um, I think when you marry, when you think about the benchmark investment strategy, it's helpful to marry the north stars that we talked about in terms of every investment needs to be potentially absolutely astronomical money on money returns for LPs, and we want to be the most meaningful partner to our founders. Um, there's a lot of different ways to do that, and so I think you, you marry those north stars, With the personal investing style of each of the GPs, like each of us is 25% of benchmark, and we work really well together, and we're a super tight-knit team, but each of us has our own styles. And so even if Eric, uh, tends to love getting in right at inception, And be the first check in and be, you know, really, really in the, the kind of like, uh, primordial soup phase of, of a startup. It doesn't mean that myself or Chathan or Peter are always going to operate exactly at that stage. We all have our particular preferences. I think Peter does an amazing job of just let it like following his founder conviction. And like, he doesn't think about stages. Like when he finds a Howie, when he finds a Brett, when he finds any of these founders, That is what he lets him. That's what guides him. And he's like, I'm going to find a way to become the most meaningful partner to this founder. And I'm…

AI assessment note: “marry those north stars with the personal investing style of each of the GPs”

Q And you say about being best partner. I think if you can answer it, it's helpful because your Dellians doesn't help where he says, well, you just fire founders continuously. Is that not slightly incongruous being the firm that fires founders and also your best partner?

A I'll, I'll start with Dellians media strategy. Dellian and, you know, love Dellian. He's a close buddy of mine. So I hope he doesn't, I don't think he'll mind me saying this cause he, he certainly busts my balls more than, more than enough. Um, Dellian has, has always found an amazing kind of media and Twitter strategy, which is, Go find, you know, someone with, with like, you know, a stalwart brand or like go find the biggest person on the playground and go punch him in the face. Um, and people love it and it gets a lot of likes and it gets a lot of clicks. Um, and, and it helps raise your, your kind of profile, and it, it almost like elevates you to, to their positioning. He's in it to Sequoia an immense amount. He's done it to Andreessen over the years, and we have not been spared the, the, the clickbait, um, you know, Delian tweets either. Um, no, I think, I mean, obviously that like every, every story has an immense amount of nuance and what happens between a board and a founder and a management team, um, that there's just an immense amount that goes into every single one of those decisions. And, again, like, I think, you know, times also completely change. Like, in the nineties and early aughts, um, you know, like, if you think about, like, if you read about or hear about the Google investment, It's like, you know, Kleiner and Sequoia do the Google investment and immediat…

AI assessment note: “every story has an immense amount of nuance and what happens between a board”

Q Or it's like, you know what, I'm gonna wait until I find the perfect company, and only when I find the perfect company, Am I gonna commit to it? Which side do you sit on?

A Yeah, my first investment. I mean, I won't lie to you, Harry, the weight of being a benchmark GP exists. Like, I definitely feel it. Like, it's, it's, you're like, wow, like, you know, the people that have walked these halls, Bill Gurley, Mitch Lasky, Matt Kohler, incredible people with incredible track records, and you feel a lot of pressure to, like, live up to the history of this place and the history of the brand. Um, I think I got really, really good advice. I won't name the partner Um, just so, so no one can trace back to, to what company they're talking about. But one of the partners coming in, um, was like, look, there's going to be nothing better for you than if your first investment sucks. Because once you do one and it fails and you realize it's not the end of the world and like life goes on and like LP still love us and like you're not fired, then you feel really comfortable and you start getting into a really, really good rhythm. Whereas like if your first one's like pretty good or like looks really good, You can then feel even more pressure on the second one. So they're like, there is something beautiful in, in having your first be a failure. That doesn't mean that I'm going to be looking for, for a failure out of my first investment, but it was really, really, um, really like, like relieving. And it was amazing advice to get that. Look, it's all okay. And if anyt…

AI assessment note: “failing actually can help you feel more relaxed as you go up to bat”

Q And you say about being best partner. I think if you can answer it, it's helpful because your Dellians doesn't help where he says, well, you just fire founders continuously. Is that not slightly incongruous being the firm that fires founders and also your best partner?

A I'll, I'll start with Dellians media strategy. Dellian and, you know, love Dellian. He's a close buddy of mine. So I hope he doesn't, I don't think he'll mind me saying this cause he, he certainly busts my balls more than, more than enough. Um, Dellian has, has always found an amazing kind of media and Twitter strategy, which is, Go find, you know, someone with, with like, you know, a stalwart brand or like go find the biggest person on the playground and go punch him in the face. Um, and people love it and it gets a lot of likes and it gets a lot of clicks. Um, and, and it helps raise your, your kind of profile, and it, it almost like elevates you to, to their positioning. He's in it to Sequoia an immense amount. He's done it to Andreessen over the years, and we have not been spared the, the, the clickbait, um, you know, Delian tweets either. Um, no, I think, I mean, obviously that like every, every story has an immense amount of nuance and what happens between a board and a founder and a management team, um, that there's just an immense amount that goes into every single one of those decisions. And, again, like, I think, you know, times also completely change. Like, in the nineties and early aughts, um, you know, like, if you think about, like, if you read about or hear about the Google investment, It's like, you know, Kleiner and Sequoia do the Google investment and immediat…

AI assessment note: “every story has an immense amount of nuance and what happens between a board”

Q Which pumped company today will have the steepest fall, do you think?

A I am not a, I mean, we're investors in cursor. I am not a believer in, um, in some of the companies that have raised a ton of money and have not released a product or like, haven't, haven't like, I'm a huge believer in like, you got to get developers hands on the product. So I think there's a couple companies that have raised like billions of dollars and they're like, oh, we're going to build the best thing ever. But they don't actually have products that a lot of, uh, developers are using. And I think that like that is going to be a rude awakening because you have like AI products get better via usage. Um, oftentimes if you have the right environments, it's like cloud code, codex, cursor, The, the companies in the apps with the highest amounts of usage are going to improve the fastest and leave everybody in the dust.

AI assessment note: “companies that have raised a ton of money and have not released a product”