The Exchanges

Q No, I absolutely love that, but I do want to discuss, before we move into the quickfire round, an element of transition moving from operator to VC. So talk to me, Ali, what's been the biggest challenge about making the transition from operator to VC for you?

A You know, I think the biggest challenge is, as an operator, almost every decision you make, you can either test at small scale to see if it works, Or reverse it if it doesn't work. And as an investor, once you've made an investment, there's really no reversing it. There's no such thing as trying it in small scale. You know, it's more of a binary decision. It's almost like being a hunter. If you're hunting for deer, and once you decide to shoot a deer, like, it's sort of over. You've shot the deer, and you can't test that in small scale. Now, hunting and investing are different in many, many ways, but the sort of finality of the investing decision and your inability to test things at small scale or undo them I think is probably the biggest challenge that I've encountered anyway.

AI assessment note: “finality of the investing decision... is probably the biggest challenge that I've encountered”

Q No, I completely agree. I remember crying at the movie when I saw it, but I do have to ask, you mentioned some incredible names there, from Steve Jobs to Ed Catmull to working with Jack at Twitter, so I do have to ask, what were the takeaways, obviously apart from Steve's attractive glare, in terms of their operations, and really what it takes to be a great leader?

A Yeah, I think the biggest lesson that I took is that there's not one formula to being a great leader. All of the folks that you just mentioned and other Great leaders like Jack Dorsey or Bob Iger, et cetera, that I've had the privilege to work very closely with. They're all so different. I think the lesson there is that if you aspire to be a great leader, you can't seek to copy Steve Jobs or anyone else in your quest to be a great leader. You have to be yourself. But having said that, having observed the diversity of styles and approaches and demeanors of great leaders, there are, I think, three fundamental traits that all great leaders share. And I've thought a lot about this. I have actually written a blog post about this called How do you measure leadership? But the three traits that I think are fundamental are number one, great leaders all share an incredible clarity of thought and communication. And the reason that's important is you have to describe a compelling vision of the future that other people can understand, get excited about and follow. And so if you can't do that, or if it's muddled or it changes, then, you know, it's very hard to lead. The second is great leaders have exceptional judgment about people. They choose the right people to work with them. They choose the right people to give authority to. And if you make the wrong decisions, if you have bad judgment …

AI assessment note: “three traits that I think are fundamental are number one, great leaders all share”

Q I do have to ask then, how do you think with that experience and knowledge that affects how you evaluate and analyze founders now on the other side of the table as a VC with the Continuity Fund?

A You know, I think assessing the quality of a leadership team and the quality of a CEO is pretty fundamental to this job. You know, I describe those three characteristics that I think all great leaders share, and When you're evaluating a team of entrepreneurs, I think those same three criteria are important. I think it's very important that an entrepreneur be able to describe in a compelling, concise, clear way. What is the problem they're trying to solve and why, and how does their approach, what is their unique perspective on the universe or their customer that they see that other people don't see that they intend to solve? It's very important to evaluate how their skill at evaluating people and hiring and building a great leadership team around them. And that really comes down to their judgment about people. And finally, when we make an investment at the YC early stage or at a later stage, you know, these are very long-term relationships that you have with founders. And, you know, as I mentioned, there's going to be all sorts of ups and downs and hardships to overcome. And so assessing the integrity and personal commitment of an entrepreneur is also really critical. So I think those are, as I look at it, three pretty crucial things to evaluate when you're evaluating the quality of the team. And then later on, after you invest, These are also areas that you can help people kin…

AI assessment note: “evaluating a team of entrepreneurs, I think those same three criteria are important”

Q No, I completely agree. I remember crying at the movie when I saw it, but I do have to ask, you mentioned some incredible names there, from Steve Jobs to Ed Catmull to working with Jack at Twitter, so I do have to ask, what were the takeaways, obviously apart from Steve's attractive glare, in terms of their operations, and really what it takes to be a great leader?

A Yeah, I think the biggest lesson that I took is that there's not one formula to being a great leader. All of the folks that you just mentioned and other Great leaders like Jack Dorsey or Bob Iger, et cetera, that I've had the privilege to work very closely with. They're all so different. I think the lesson there is that if you aspire to be a great leader, you can't seek to copy Steve Jobs or anyone else in your quest to be a great leader. You have to be yourself. But having said that, having observed the diversity of styles and approaches and demeanors of great leaders, there are, I think, three fundamental traits that all great leaders share. And I've thought a lot about this. I have actually written a blog post about this called How do you measure leadership? But the three traits that I think are fundamental are number one, great leaders all share an incredible clarity of thought and communication. And the reason that's important is you have to describe a compelling vision of the future that other people can understand, get excited about and follow. And so if you can't do that, or if it's muddled or it changes, then, you know, it's very hard to lead. The second is great leaders have exceptional judgment about people. They choose the right people to work with them. They choose the right people to give authority to. And if you make the wrong decisions, if you have bad judgment …

AI assessment note: “three fundamental traits that all great leaders share... number one, great leaders all share”

Q And then what do you believe that most around you disbelieve?

A You know, it's funny. I'll have to, in a way, this is sort of Pixar thinking, and I haven't tested this as much in the venture world, but in Hollywood, in the filmmaking business, I think one of the things that's very differentiated about Pixar, and what I also deeply believe, is that a great team is more important than a great idea. And I think in Hollywood, like everyone's chasing scripts and ideas and this, that, and the other thing. And Pixar is just focused on the quality of the team that it's able to put together. The idea being a great team will, you know, fix an idea that's mediocre or throw it out and come up with a better one. And I think in the venture business, sometimes there is maybe a little bit too much of a focus on the idea, the product, the market opportunity, and maybe not enough of an emphasis on the team. So that's what I would say.

AI assessment note: “a great team is more important than a great idea”