The Exchanges

Q Yeah, that's a pretty special time. In terms of the board members themselves, is there any individuals who you've most learned from and most kind of admired in your time as a board member?

A Yeah, there's a couple people that I would always lean in to try to work with. So I love Mike Maples from Floodgate. He's been, I've been on a couple boards with him. What he does is so well, he has high empathy for CEOs. It seems in every board meeting, he says at least one thing that's game changing. By the way, for a board member, there's a difference between zero game change events and one game changing thing in a single meeting is infinite. You know, my experience in boards, most people who sit in a boardroom don't say a single useful thing, you know, so if there's only five useful things, if the goal, the high watermark is five useful things in three hours, and when there's five board members, now you know what your job is. So Mike Maples is great, and then I love the Union Square Ventures team. So I'm doing a board now with Brad Burnham, and he was early on in Audible as well, and now we work together on Duolingo. Fred Wilson is kind of the The crown prince of New York venture capital and a great blogger. He was extremely helpful in the early days of Zynga, even though he was mostly dialed in. He's just such a crisp, sharp thinker. And then Albert Wenger, he created the meme of hacking education, which I'm a fanboy of. And that was probably in oh nine or oh 10. He convened leading thinkers. And interestingly enough, they didn't invest in any learning and Companies for se…

AI assessment note: “Mike Maples is great, and then I love the Union Square Ventures team.”

Q What's your favorite book and why? I don't think Taylor Swift's quite done an autobiography yet. Actually, she probably has done.

A Let's see. My most favorite recent book is called Dataclism. It's the social scientist who writes the blog for OkCupid. That's fascinating. It's kind of, uh, the, the, the Freakonomics of people. Let's see if I had to take one book away to read. On a desert island, it would be a book called The Discoveries about the great scientific papers of the 20th century, and then right now I'm rereading, so my favorite book series is called Spencer by Robert Parker. It's a detective series that made it a bad TV show. It's about a forty-book series. I restarted from the beginning. I'm now at book seven, and what I like about him is Spencer is a former pugilist, so he's A big guy. He's fit. He's kind of like American detectives. He kind of weighs into stuff, but he also quotes literature and has an amazing girlfriend with whom they have Nick and Nora type repartee, so I can't get enough of Spencer.

AI assessment note: “my favorite book series is called Spencer by Robert Parker”

Q Yeah, that's a pretty special time. In terms of the board members themselves, is there any individuals who you've most learned from and most kind of admired in your time as a board member?

A Yeah, there's a couple people that I would always lean in to try to work with. So I love Mike Maples from Floodgate. He's been, I've been on a couple boards with him. What he does is so well, he has high empathy for CEOs. It seems in every board meeting, he says at least one thing that's game changing. By the way, for a board member, there's a difference between zero game change events and one game changing thing in a single meeting is infinite. You know, my experience in boards, most people who sit in a boardroom don't say a single useful thing, you know, so if there's only five useful things, if the goal, the high watermark is five useful things in three hours, and when there's five board members, now you know what your job is. So Mike Maples is great, and then I love the Union Square Ventures team. So I'm doing a board now with Brad Burnham, and he was early on in Audible as well, and now we work together on Duolingo. Fred Wilson is kind of the The crown prince of New York venture capital and a great blogger. He was extremely helpful in the early days of Zynga, even though he was mostly dialed in. He's just such a crisp, sharp thinker. And then Albert Wenger, he created the meme of hacking education, which I'm a fanboy of. And that was probably in oh nine or oh 10. He convened leading thinkers. And interestingly enough, they didn't invest in any learning and Companies for se…

AI assessment note: “I love Mike Maples from Floodgate. He's been, I've been on a couple boards”

Q What's your favorite book and why? I don't think Taylor Swift's quite done an autobiography yet. Actually, she probably has done.

A Let's see. My most favorite recent book is called Dataclism. It's the social scientist who writes the blog for OkCupid. That's fascinating. It's kind of, uh, the, the, the Freakonomics of people. Let's see if I had to take one book away to read. On a desert island, it would be a book called The Discoveries about the great scientific papers of the 20th century, and then right now I'm rereading, so my favorite book series is called Spencer by Robert Parker. It's a detective series that made it a bad TV show. It's about a forty-book series. I restarted from the beginning. I'm now at book seven, and what I like about him is Spencer is a former pugilist, so he's A big guy. He's fit. He's kind of like American detectives. He kind of weighs into stuff, but he also quotes literature and has an amazing girlfriend with whom they have Nick and Nora type repartee, so I can't get enough of Spencer.

AI assessment note: “My most favorite recent book is called Dataclism”

Q You mentioned a kind of key aspect about being on the board is being attentive to cash. I'm always very confused with the dichotomy of being a VC and being a board member as to what extent you should be the cheerleader and to what extent you should be the realist. How do you balance this difficult comparison in your head as a board member?

A Jeff Bezos says there's a leadership principle in Amazon which is to be right a lot, and he says people who write a lot, who write a lot are good listeners and they're skeptical optimists. Skeptical optimist is basically to ask hard questions, imagine something isn't going to work, but talk about it not in a negative tone of voice. Engineers in general, a lot of people who work with our engineers or think like them, engineers tend to love Luxuriating and failures, and they attack failures often with a tone of voice and a negative tone of voice, and that negative tone of voice, you can watch other people in the room, and it's very hard for people not to feel like the negative tone of voice is about them personally, not about the problem. So in general, the trick is to ask challenging questions with a smile. My partner, Randy Commissar, is an expert at this. He nods his head a lot. And some people are fun and have sparkling eyes and, you know, good mirror neurons. But we've learned again and again and again that psychologists can prove that creativity is enhanced with confidence. And confidence is built with optimism and with earned success. So I'd say in general, it's ask hard questions, but don't be an asshole.

AI assessment note: “Skeptical optimist is basically to ask hard questions... not in a negative tone”

Q You mentioned some incredible VCs there. I had Peter Fenton on the show recently, and he said, with regards to price sensitivity, never to turn down a company based on valuation with it being a mental trap. I'm intrigued with you having seen so many deals and being part of so many home runs. What's your perspective on the price sensitivity element and whether you agree with Peter's statement?

A I think it's, I think it's part of the answer. Um, my math is different than that. My math is never do a merger and acquisition deal if you wouldn't pay double. Because the ones that work, basically a year later, they're twice as valuable as you thought they were. And the ones that don't work, the amount you spend probably doesn't matter. So that's an M&A. In real estate, I'd go in the other direction. It's never overpay. My real estate friends are always thinking about how to get out at the back end, and real estate has constrained upside. So buying well is probably the most important thing in real estate. Early stage venture, which I think Fenton is talking about, you know, where it's either a home run or a bunt single. If you're big game hunting, you want to, you think you want to get it at any price, but the The negative about that is most of the things that you think you're big game hunting for don't work out, and if you can do 30 investments in a fund and you overpay by double, and there's x percent are gonna be big winners, now you've cut your at-bats in half. So I think it's useful at the edges. I don't know any successful investor in companies who invest that way. I think what it comes down to is If you really, really, really, really, really want to be involved with a company, and the market price is 25% higher than you think it should be, then, you know, remind yourse…

AI assessment note: “I think it's part of the answer. Um, my math is different than that.”

Q You mentioned some incredible VCs there. I had Peter Fenton on the show recently, and he said, with regards to price sensitivity, never to turn down a company based on valuation with it being a mental trap. I'm intrigued with you having seen so many deals and being part of so many home runs. What's your perspective on the price sensitivity element and whether you agree with Peter's statement?

A I think it's, I think it's part of the answer. Um, my math is different than that. My math is never do a merger and acquisition deal if you wouldn't pay double. Because the ones that work, basically a year later, they're twice as valuable as you thought they were. And the ones that don't work, the amount you spend probably doesn't matter. So that's an M&A. In real estate, I'd go in the other direction. It's never overpay. My real estate friends are always thinking about how to get out at the back end, and real estate has constrained upside. So buying well is probably the most important thing in real estate. Early stage venture, which I think Fenton is talking about, you know, where it's either a home run or a bunt single. If you're big game hunting, you want to, you think you want to get it at any price, but the The negative about that is most of the things that you think you're big game hunting for don't work out, and if you can do 30 investments in a fund and you overpay by double, and there's x percent are gonna be big winners, now you've cut your at-bats in half. So I think it's useful at the edges. I don't know any successful investor in companies who invest that way. I think what it comes down to is If you really, really, really, really, really want to be involved with a company, and the market price is 25% higher than you think it should be, then, you know, remind yourse…

AI assessment note: “I don't know any successful investor in companies who invest that way.”

Q You mentioned a kind of key aspect about being on the board is being attentive to cash. I'm always very confused with the dichotomy of being a VC and being a board member as to what extent you should be the cheerleader and to what extent you should be the realist. How do you balance this difficult comparison in your head as a board member?

A Jeff Bezos says there's a leadership principle in Amazon which is to be right a lot, and he says people who write a lot, who write a lot are good listeners and they're skeptical optimists. Skeptical optimist is basically to ask hard questions, imagine something isn't going to work, but talk about it not in a negative tone of voice. Engineers in general, a lot of people who work with our engineers or think like them, engineers tend to love Luxuriating and failures, and they attack failures often with a tone of voice and a negative tone of voice, and that negative tone of voice, you can watch other people in the room, and it's very hard for people not to feel like the negative tone of voice is about them personally, not about the problem. So in general, the trick is to ask challenging questions with a smile. My partner, Randy Commissar, is an expert at this. He nods his head a lot. And some people are fun and have sparkling eyes and, you know, good mirror neurons. But we've learned again and again and again that psychologists can prove that creativity is enhanced with confidence. And confidence is built with optimism and with earned success. So I'd say in general, it's ask hard questions, but don't be an asshole.

AI assessment note: “So I'd say in general, it's ask hard questions, but don't be an asshole.”

Q naturally being such a venture nerd, so many things to unpick there. You said about kind of when things don't go right, there's not much you can do there. How do you address time allocation now with Kleiner in a portfolio? Is it a case of pour your time into the winners because that's where the fund returns come? Or how do you allocate that time effectively between portfolio companies?

A Well, I've discovered that people tend to fall on one of two personalities. It's fix your losers or ride your winners. And one can prove with anecdote that either works. You know, my sense is just some people who hate failure, and so they focus on fixing losers. Most people who are pure investors tend to ride winners rather than trying to fix losers. It's kind of get out of your losers at any price. My friend Mark Pincus does that in real estate. He's the only person I've ever met who, when he decides to sell real estate, he sells at market. Everybody else I've ever met wants to hold real estate until they at least get their money back. And Mark, I think great investors think about expected value, not loss avoidance. So let's see, I look at my, I look at my time, uh, the way I organize my time. And it's a good question because what I found is high achievers in adulthood end up being time masters. I set quarterly objectives, OKRs, now using a company we're involved with called BetterWorks, set my OKRs, and the difficulty of the objectives tend to match my expectation of setting time. So, you know, if there's not much to do, then the objectives, it's be valuable in a board meeting, and if there's more to do, it's help on this product, do these kind of reviews, meet these people, do this kind of recruiting, and so I kind of know when I start a About how much time I'm going to spen…

AI assessment note: “I set quarterly objectives, OKRs... match my expectation of setting time.”

Q Okay, let's put that on you then. If we were to talk about the best board meeting and why, and that initiative that got shaped, what would you say that is from your wealth of experience?

A Oh, let's see. I remember the board meeting on Amazon where we first talked About what become Amazon Web Services, AWS. I remember the first time, I remember a series of meetings that led to the presentation of Kindle. I remember a series of meetings that led to the presentation of Prime. Let's see, at, um, you know, at Zynga, there have been, I remember, multiple CO meetings, and then scale meetings. Oh, there's a network, a company, Neil Young, former EA and Virgin, and NG MoCo, Those board meetings, you know, he's done, he did one big pivot, and I remember that. They founded, they did this company called NG Mocha, sold it to DNA. It was a great early mobile game company, but their non-compete expired, and they were, they raised money from the investors the first time around. They were building a Pinterest video, and they spent two years on it, and they kept trying to do mini-pivots, trying to do mini-pivots, and And they came back from a Christmas holiday, and the three of us sat down in January and said, we've decided maybe we should just go be a game company. By the time the meeting was over, they had a business plan, a funding plan, a personnel plan, and a first three product idea. That was awesome.

AI assessment note: “By the time the meeting was over, they had a business plan, a funding plan”

Q Okay, let's put that on you then. If we were to talk about the best board meeting and why, and that initiative that got shaped, what would you say that is from your wealth of experience?

A Oh, let's see. I remember the board meeting on Amazon where we first talked About what become Amazon Web Services, AWS. I remember the first time, I remember a series of meetings that led to the presentation of Kindle. I remember a series of meetings that led to the presentation of Prime. Let's see, at, um, you know, at Zynga, there have been, I remember, multiple CO meetings, and then scale meetings. Oh, there's a network, a company, Neil Young, former EA and Virgin, and NG MoCo, Those board meetings, you know, he's done, he did one big pivot, and I remember that. They founded, they did this company called NG Mocha, sold it to DNA. It was a great early mobile game company, but their non-compete expired, and they were, they raised money from the investors the first time around. They were building a Pinterest video, and they spent two years on it, and they kept trying to do mini-pivots, trying to do mini-pivots, and And they came back from a Christmas holiday, and the three of us sat down in January and said, we've decided maybe we should just go be a game company. By the time the meeting was over, they had a business plan, a funding plan, a personnel plan, and a first three product idea. That was awesome.

AI assessment note: “By the time the meeting was over, they had a business plan, a funding plan”

Q naturally being such a venture nerd, so many things to unpick there. You said about kind of when things don't go right, there's not much you can do there. How do you address time allocation now with Kleiner in a portfolio? Is it a case of pour your time into the winners because that's where the fund returns come? Or how do you allocate that time effectively between portfolio companies?

A Well, I've discovered that people tend to fall on one of two personalities. It's fix your losers or ride your winners. And one can prove with anecdote that either works. You know, my sense is just some people who hate failure, and so they focus on fixing losers. Most people who are pure investors tend to ride winners rather than trying to fix losers. It's kind of get out of your losers at any price. My friend Mark Pincus does that in real estate. He's the only person I've ever met who, when he decides to sell real estate, he sells at market. Everybody else I've ever met wants to hold real estate until they at least get their money back. And Mark, I think great investors think about expected value, not loss avoidance. So let's see, I look at my, I look at my time, uh, the way I organize my time. And it's a good question because what I found is high achievers in adulthood end up being time masters. I set quarterly objectives, OKRs, now using a company we're involved with called BetterWorks, set my OKRs, and the difficulty of the objectives tend to match my expectation of setting time. So, you know, if there's not much to do, then the objectives, it's be valuable in a board meeting, and if there's more to do, it's help on this product, do these kind of reviews, meet these people, do this kind of recruiting, and so I kind of know when I start a About how much time I'm going to spen…

AI assessment note: “Most people who are pure investors tend to ride winners rather than trying to fix losers.”