The Exchanges

Q Would you give yourself a 10 out of 10 for winning then?

A We don't give 10 out of tens, but I'd probably give us a nine out of 10 for winning. I think some people want to believe that because we have this nice brand, we can just waltz in and founders will hand the shares in their company. And that is far from true. Like it is an absolute knife fight every time. And we try to have a team and a culture where even if your business card meant nothing and nobody had ever heard of the name Sequoia, you could still be put in position to win because you built the sort of relationship with the founder that just makes them want to be in business with you independent of, you know, what firm you're from.

AI assessment note: “I'd probably give us a nine out of 10 for winning.”

Q When you review investment decisions internally at Sequoia in terms of like the voting process and the process to get it done, are the unanimous ones generally the best outcomes or are the contrarian ones the best outcomes?

A So we have, we have actual data on this going back to 20 14 where we, we started recording the votes numerically on every single investment. So we have about 10 years worth, which believe it or not is not conclusive because there are so few outliers that have emerged even in the last 10 years. Best we can tell whether something is consensus or contentious actually doesn't matter. The thing that matters is presence of conviction. So there could be investments where everybody's a six and the voting is zero to 10, no fives. So six is above the line. Six is lukewarm enthusiasm. There could be an investment where everybody's a six and then compare that to investment where one person's a nine, two people are eights, and then some people hate it. There are some twos and threes.

AI assessment note: “whether something is consensus or contentious actually doesn't matter”

Q When you review investment decisions internally at Sequoia in terms of like the voting process and the process to get it done, are the unanimous ones generally the best outcomes or are the contrarian ones the best outcomes?

A So we have, we have actual data on this going back to 20 14 where we, we started recording the votes numerically on every single investment. So we have about 10 years worth, which believe it or not is not conclusive because there are so few outliers that have emerged even in the last 10 years. Best we can tell whether something is consensus or contentious actually doesn't matter. The thing that matters is presence of conviction. So there could be investments where everybody's a six and the voting is zero to 10, no fives. So six is above the line. Six is lukewarm enthusiasm. There could be an investment where everybody's a six and then compare that to investment where one person's a nine, two people are eights, and then some people hate it. There are some twos and threes.

AI assessment note: “whether something is consensus or contentious actually doesn't matter. The thing that matters is presence of conviction.”

Q We did mention first round though there, and I actually had Josh Koppelman on the show, and he said something that was so striking when it came to how he thinks about the first round team. He said, I'd rather be a better picker of partners than investments. Interesting state. How do you think about the partners you look to add to Sequoia, and what you really like to see?

A First, let me just say I completely agree, and I think first round is an amazing partnership, and they've done a lot of things right. When we look for new partners, there are three basic things that we look for. One, Some sort of outlier characteristic or something that makes that person special to whatever it is that makes that person special should be additive to what we already have here at Sequoia and then three values. And so to give you a couple of examples, when Jess Lee joined us three or four years ago, she had this incredible user empathy that translated into very warm relationships with founders and also very good insights around products that are being built for people. Which is all products. Jess also had a different set of methods than what we had historically used here, and threw herself into all raise and female founder office hours, and basically has taken a community-centric approach to venture capital, which has worked wonders. And so Jess was a terrific addition to our team because she had those outlier characteristics. They were very additive to what we already had, and she had wonderful values. And when we talk about values, there's values in an absolute sense, which means everybody has to be just Deep down a good person, and that's non-negotiable. We will happily dismiss a high performer if that turns out to not be the case, but it also means value and ki…

AI assessment note: “When we look for new partners, there are three basic things that we look for.”

Q When an investment fails, Sequoia has an extremely high bar. How does that go down internally? Because you want some accountability, but you also don't want a culture of fear. Yeah. Something that I struggle with building a firm today, honestly.

A You will never see anybody at Sequoia reprimanded, fired, chastised for a failed investment. You will never see that. Similarly, you will never see anybody at Sequoia Promoted, lauded, praised for a single great investment. And again, it's because we're in the risk taking business. And so if you have a string of bad investments, there's probably something wrong in your process. If you have a string of good investments, there's probably something right in your process. And so one data point doesn't make a trend. If somebody has a bad investment or a great investment, we're not going to, we're not going to react. Um, we do try to inspect the inputs as much as possible because we're in a long feedback cycle business. Right? And so the, the activities that somebody is doing today may not produce tangible results for another five or 10 years, and so we try to inspect the activities, we try to inspect the behaviors. If the activities and the behaviors are good, but one of the outcomes happens to be bad, that's okay. If the activities and the behaviors are bad, and one of the outcomes happens to be good, that's probably not okay.

AI assessment note: “You will never see anybody at Sequoia reprimanded, fired, chastised for a failed investment.”

Q Does it have to be a counter narrative? Can it be a prevailing narrative, which is everyone sees it and we all agree, or does it have to be like a narrative violation?

A I don't think that there are any bonus points awarded for degree of difficulty. I think because there are a lot of very smart people in the world of venture capital, one currency is I'm going to be contrarian and right. And then I get to be smarter than everybody else. I don't care whether we're contrarian or not. I just want us to help the Daringfield legendary companies and generate exceptional net multiple money returns for our limited partners. And so some of the investments that I've been a part of, so for example, HubSpot back in the day, we led the series D in 2011. We would later find out that we were the only term sheet. Nobody else wanted to invest. And even inside the partnership, it was controversial. Um, Okta.

AI assessment note: “I don't care whether we're contrarian or not.”

Q You have to understand, as a venture nerd, this conversation just makes me so happy. Who's the best sorcerer in Sequoia?

A Oh, the best sorcerer. Everybody has very different methods, so it's hard to say. The first name that comes to mind is David Kahn. David joined us about a year ago. He is an absolute force of nature. Um, I get into the office pretty early. He's always in there on a Zoom when I get in. Um, he's always in there when I leave. David, David is just a total force of nature. I think his, some people are high volume, some people are high quality. He's both, so he's right up there. I think Sonia's done a really good job of making a name for herself in the world of AI, and creating magnets in the form of, ah, in the form of blogs, in the form of a, a podcast that we're releasing soon. I think Sonia's done a really good job putting herself in that position.

AI assessment note: “The first name that comes to mind is David Kahn.”

Q Uh, tell me, what's the most memorable first founder meeting you've had?

A Two of them come to mind. One, one was Eric Yuan, just because he was in This terrible office. Um, but he was so full of joy and energy and enthusiasm because of this product that he was building. And it just reinforced focusing on the things that actually matter. So that was one that was pretty memorable. The other one was in the summer of 2007. So I joined Sequoia in March of 2007. In the summer of 2007, Jim Goetz and I come over here to London to look at an investment That we were contemplating at the time. And I convinced him to take a day trip with me to Sweden. So we flew into Copenhagen, then we drove across the bridge to Malmo or whatever's over there. And there's this thing called the Lund or Lund technology park that had a whole bunch of startups in it. Guess was very skeptical about this trip to Southern Sweden. And that was reinforced when we got lost on the way to this technology park, we took the wrong exit off the freeway and we're just Lost in the middle of farmland, stuck behind a tractor. Like literally there's a tractor in front of us taking up the whole road. And Jim and I are sitting there behind the tractor and he turns to me and he's like, there's a technology company around here. Um, and then anyway, the, the, the, it was this company called click tech run by this guy named Mons Holtman. And it actually turned out to be a great business. It ended up goin…

AI assessment note: “Two of them come to mind. One, one was Eric Yuan”

Q Is it hard to inspire that humility in new joiners?

A I was talking with this guy named Ben Jacobs the other day who was, used to be the CIO of Viking, and he left to start his own firm four or five years ago, and one of the comments he made really stuck with me, which was when you work at a name brand place like a Viking or like a Sequoia, You're attracting people who want to be part of something great, not people who want to build something great. That really stuck with me because one of the things that has allowed us to remain relevant for 50 plus years now is this sort of underdog mentality and the sense of desperation and the sense that tomorrow is not our birthright. Like we have to work to earn it today. And I do worry that we may have adverse selection. When we try to find people, because they're attracted to the name brand, and they're attracted to a place that's already been built, versus being attracted to a place where they feel like they can build. And I think we, I think we screen for that reasonably well, and I think if you look at our team, for the most part, they are hungry, ambitious, chip on the shoulder, overachiever types. And so I, I think we have pretty good DNA, but it is something I worry about.

AI assessment note: “I do worry that we may have adverse selection.”

Q Uh, tell me, what's the most memorable first founder meeting you've had?

A Two of them come to mind. One, one was Eric Yuan, just because he was in This terrible office. Um, but he was so full of joy and energy and enthusiasm because of this product that he was building. And it just reinforced focusing on the things that actually matter. So that was one that was pretty memorable. The other one was in the summer of 2007. So I joined Sequoia in March of 2007. In the summer of 2007, Jim Goetz and I come over here to London to look at an investment That we were contemplating at the time. And I convinced him to take a day trip with me to Sweden. So we flew into Copenhagen, then we drove across the bridge to Malmo or whatever's over there. And there's this thing called the Lund or Lund technology park that had a whole bunch of startups in it. Guess was very skeptical about this trip to Southern Sweden. And that was reinforced when we got lost on the way to this technology park, we took the wrong exit off the freeway and we're just Lost in the middle of farmland, stuck behind a tractor. Like literally there's a tractor in front of us taking up the whole road. And Jim and I are sitting there behind the tractor and he turns to me and he's like, there's a technology company around here. Um, and then anyway, the, the, the, it was this company called click tech run by this guy named Mons Holtman. And it actually turned out to be a great business. It ended up goin…

AI assessment note: “Two of them come to mind. One, one was Eric Yuan”

Q When an investment fails, Sequoia has an extremely high bar. How does that go down internally? Because you want some accountability, but you also don't want a culture of fear. Yeah. Something that I struggle with building a firm today, honestly.

A You will never see anybody at Sequoia reprimanded, fired, chastised for a failed investment. You will never see that. Similarly, you will never see anybody at Sequoia Promoted, lauded, praised for a single great investment. And again, it's because we're in the risk taking business. And so if you have a string of bad investments, there's probably something wrong in your process. If you have a string of good investments, there's probably something right in your process. And so one data point doesn't make a trend. If somebody has a bad investment or a great investment, we're not going to, we're not going to react. Um, we do try to inspect the inputs as much as possible because we're in a long feedback cycle business. Right? And so the, the activities that somebody is doing today may not produce tangible results for another five or 10 years, and so we try to inspect the activities, we try to inspect the behaviors. If the activities and the behaviors are good, but one of the outcomes happens to be bad, that's okay. If the activities and the behaviors are bad, and one of the outcomes happens to be good, that's probably not okay.

AI assessment note: “You will never see anybody at Sequoia reprimanded, fired, chastised for a failed investment.”

Q You have to understand, as a venture nerd, this conversation just makes me so happy. Who's the best sorcerer in Sequoia?

A Oh, the best sorcerer. Everybody has very different methods, so it's hard to say. The first name that comes to mind is David Kahn. David joined us about a year ago. He is an absolute force of nature. Um, I get into the office pretty early. He's always in there on a Zoom when I get in. Um, he's always in there when I leave. David, David is just a total force of nature. I think his, some people are high volume, some people are high quality. He's both, so he's right up there. I think Sonia's done a really good job of making a name for herself in the world of AI, and creating magnets in the form of, ah, in the form of blogs, in the form of a, a podcast that we're releasing soon. I think Sonia's done a really good job putting herself in that position.

AI assessment note: “The first name that comes to mind is David Kahn.”

Q Well, you are very, very kind, but I want to get the ball rolling, and for those that made the crime of missing our special round one, how did you make your way into what I know to be the wonderful world of venture, and come to be a partner at the world-renowned Sequoia?

A I suppose there were a lot of fortuitous circumstances along the way, maybe starting with I was born into a wonderful family with mom and dad who I think were very focused on turning me into a good person or so than anything else, and a brother who is 15 months older than me, which always gave me something to try to stretch for and keep up with. We're in Wyoming, which was a coal mining town, which is a unconventional place to spawn a budding venture capitalist, but I went from there to Boston College, where I studied initially physics and finance, and from there to Summit Partners in Boston, which was my first taste Of the investing world. I was at summit for about two and a half years and picked up a lot of the basic tools of investing, but then wanted to feel like I was closer to founders and wanted to feel like I had a little bit more of a role in helping folks to build durable businesses. And that was what drew me out to Sequoia. So I was lucky enough to come out here at the age of 24 back in 2007 and spent my first four or five years As an apprentice, I got to work with everybody else at Sequoia. Mostly Doug Leone and Jim Goetz were kind of the two folks that I was lucky enough to work the most with. And four or five years as an apprentice, and then started leading some investments, and more recently, and just focused on building the highest performing team we can possibl…

AI assessment note: “I went from there to Boston College... Summit Partners... that was what drew me out to Sequoia.”

Q nerd when it comes to decision-making processes, one of many reasons I'm still single, Pat. But I do want to ask, in terms of the decision-making process for you, I've had many takes on the show, from Felicis who favor unanimity, to others who can very much favor conviction-driven, partner-led deals. Where do you stand on the need for consensus? Let's start with that before we dive into reserve allocation.

A That's a really good question. So consensus and conviction are two things that have pros and cons associated with them. So the positive of consensus is once you're in business with a founder, it's all hands on deck and the whole team is supportive and nobody who was negative at the time of the decision is secretly rooting for failure. The downside of consensus is that you could end up in a lowest common denominator situation. The positive of conviction is that investments are never obvious, and you really need somebody who sees something special to step up and have conviction and make an investment. The downside of conviction is that if you put it on a pedestal and make it a requirement for making a new investment, then you can unintentionally end up with a lot of false bravado, where people are acting as if they have conviction, even though they haven't necessarily done their homework. And so the thing that solves this or resolves that tension for us Is if you truly have conviction in an investment, you should be able to explain it in simple enough terms so that everybody else in the partnership understands what you see. And they may not And you still have that conviction, and people understand what it is you see that is super special and that we're playing for, then it's quite easy to end up with consensus and end up with everybody saying, hey, I wouldn't have seen this if yo…

AI assessment note: “at Sequoia, rarely do investment decisions begin with consensus... but they always end with consensus”

Q And you mentioned your start there in VC with Summit, and you went obviously straight from university to Summit, but then I have to ask, in terms of a much debated topic in terms of the apprenticeship model of VC, what are your views on this, particularly going forward as well?

A Yeah, it's a, it's a great question. I think particularly in the last five years or so, it seems like it's become very popular to put operators and founders into On a pedestal as VCs. And I think there are a lot of benefits to having been an operator or having been a founder before becoming a VC. But I think where we differ from a lot of other partnerships is we place a tremendous amount of value on tribal knowledge and the accumulated wisdom of 40 plus years of experience working with founders like Steve Jobs and Larry Page and Brian Chesky and Yankoum and Elon Musk and so many others And the benefits of all of that wisdom cannot possibly be overstated in terms of trying to make the right decisions and have the right impact on the next generation of great founders. And so we do hire operators. You know, Bill Korn ran engineering at Google before he joined us. Carl Escherbach ran the go-to-market of VMware. Alfred Linn ran Zappos. Mike Bernal was pretty high up in the organization at Facebook. So we do hire plenty of operators, and we get a lot of benefit from them. But we also hire people who are Much, much, much earlier in their career who are essentially just raw DNA. And the benefit we get from the raw DNA is fresh perspective and a chance to mold people in the image of Sequoia with all of that tribal knowledge. And just to use one example, if you look at my partner, Doug L…

AI assessment note: “we place a tremendous amount of value on tribal knowledge and the accumulated wisdom”

Q And in terms of, we mentioned the data there, I mean, I'm intrigued. Do you think then that data has finally been given its kind of utility value With the rise of AI in recent years, do you think finally we have a role for it now in, in kind of mass consumer worlds?

A So yes and no. I actually think the challenge with data has rarely been the processing power or the frameworks through which it's analyzed. I think the challenge with data has been the last mile problem. And what I mean by that is basically just connecting it to human beings who have actual problems at the time and in the context of Of those problems that they're trying to solve. And possibly the best example of this, which is a very popular one, is Moneyball. You know, the 2002 Oakland Athletics, which had a payroll of forty four million, which is very low for a major league team, but managed to win 103 games, which was the most of the majors. The Yankees also won 103 games that year, but they did it with a payroll of one hundred and twenty five million. And so the Oakland A's essentially had three X The productivity of the Yankees simply because they understood their own data. And what's really interesting about this, it's not that they had a Hadoop cluster fired up in the dugout. It was a very simple Excel-based analysis that they'd done. So it wasn't power of the tool. It was the fact that they had somebody right there whispering in the manager's ears at the time of making the decision that made it work. And I think a business analog would be our company that we're investors in called Medallia, which is based here in Palo Alto. Medallia focuses on customer experience. They …

AI assessment note: “So yes and no. I actually think the challenge with data has rarely been”

Q Yeah, really loved doing that show. The final element was the harvesting. Um, What have been the biggest lessons in terms of generating value from sales? Because you have the question of, when do I sell? Do I hold? What have been some of the biggest lessons there?

A It's really hard. Um, there are companies that we sold way too soon, and when I say we, the founders, you know, ultimately we are in support of the founders, but YouTube is a canonical example. PayPal is a canonical example. You know, so there are companies that have been sold way too soon. There are also companies that we hold onto, held onto for too long. There's one in our portfolio now that I'm not going to name, but we had an offer from somebody to buy the company for almost five billion dollars. We own just north of 20%. That would have been a huge home run. Now the company looks like it is, ah, kind of not headed in a very good direction.

AI assessment note: “there are companies that we sold way too soon”

Q spoke to Sean McGuire, and he said, you've got to just start with the upbringing, and Matt Miller said this too. He said, like, You know, growing up in Wyoming, you know, doing roofs in the summer holidays. Just talk to me about the childhood in terms of what do you think shaped you most? So you don't need to give a narrative on what, but what shaped you most?

A I think my one-liner would be happy, but desperate. Yeah, and the word sounds like my love life. The word, the word desperate is probably a bit too dramatic in the context of the first word, because it was, it was very happy. My parents were wonderful people. I got a great, great brother, you know, is a very loving family. There's no trauma. There's no suffering in my childhood, but the, um, uh, but the desperate piece, I think like a lot of people who grow up in small towns, you just have this desperate need to figure out what else is out there. And when you're in a small town, even if it's a very nice town, and we lived in Gillette, Wyoming, which is in the northeastern part of the state, it's coal mining country, but it's a really, it's a really nice place to grow up. Even when you're in a nice place like that, you just feel like the world is small and feel like there must be more out there. And you kind of have this desperate need to go figure out what that is. And so when I was in high school, I think the, my greatest fear was boredom. And I think now that kind of translates into my greatest fear, which is probably irrelevance, just kind of feeling like you are Are living a life that is worthwhile.

AI assessment note: “I think my one-liner would be happy, but desperate.”

Q me so many years ago, when I, I literally was like a 19 year old, and you have family, you are now head of Sequoia, you have so much constraints on your time. Why were you so kind to me? I've never asked you that, but I've often taught it, and we still have regular calls, and I know how busy you are. Why, why, why did you do it?

A So, Ravi, who you know, was Sharing this concept one time of there are a lot of people who are sort of like auditioning for their lives versus just living their lives, meaning they are doing the things that they think they're supposed to do and jumping through the hoops that people have told them to jump through, but they haven't really figured out what it is they want to be, what it is they want to do, and what it is they want out of life. And so I mentioned this in relation to your question, because most of the people I encounter who are earlier in their career are sort of auditioning for their lives. They haven't really figured out what it is they want, how they want to get there. And they might be working hard, but they're kind of going through the motions. And I think When I first met you, it was very different. And it was clear that you were not auditioning for your life. You were living your life and you had decided what you wanted. You had come up with a way to go get it. And you were very genuine, very earnest, not very earnest anymore. He was very earnest then. You're very genuine, very earnest, extremely hardworking, very curious. Um, all of the attributes that you would want out of somebody that you could be friends with or be partners with, or have a long-term relationship with. And so you made it very easy for me to be kind to you because you're the sort of person…

AI assessment note: “you made it very easy for me to be kind to you”

Q What do you think is a fair versus unfair brand tip?

A The stuff that's unfair, I think, is just related to misunderstanding about how Sequoia works, and so a lot of what you read about leadership transitions and that sort of thing is out of date. You know, again, the leadership has been pretty stable in the US-Europe business for the better part of a decade. Um, the stuff that is fair is Anytime we have an investment that blows up, um, that is our responsibility. The reason limited partners trust us with their money is because they trust us to find the right investments, make the right decisions, do rigorous diligence. And there was always some other card that you could have turned over to produce a different conclusion. And so anytime an investment blows up and people give us flack for that, that that's deserved. Like that's our job. We're in the risk taking business. And so not every investment is going to work. But at the end of the day, anytime an investment fails, that's on us.

AI assessment note: “The stuff that's unfair, I think, is... The stuff that is fair is”

Q You know, Andrew told me about you hiring him and Matt Huang, and you apparently, they hired, they started on the same day. That was a good process. Yeah. And like, both of them obviously have turned into a very, very brilliant investors. When you reflect back on your hiring process for hiring investors for the team, what have you learned? What do you do well?

A Andrew Reed, Matt Huang both started on our team in February of 2014. And so the process that led to them was conducted over the back half of 2013. And it was about the most rigorous hiring process we've ever had. Um, like top of funnel was 9000 and what came out the bottom of the funnel was Andrew Reed and Matt Huang, which is pretty spectacular couple of outputs. So I think one lesson in hiring is it is a process like any other. And yes, there's some art to it in terms of trying to really understand people, but there's also a lot of. Kind of science process management aspects to it, you know, just set it up to be a very efficient process so that you can, if you maximize top of funnel, that is one of the best ways to make sure that you're going to be happy with whatever comes out the other end of the funnel. Right? So I think that's probably one big point. The second big point, which is around the kind of art piece of it is. And this goes back to what we were saying earlier about how I've been trying to get better at sort of understanding people. Most of the time when you go into a hiring process, you have this list of things that you want, and you know that you're supposed to keep it short, but you end up with 17 things on the list because everybody has their pet rocks that they want to include. And you go into the hiring process and you come up with a candidate and you're ab…

AI assessment note: “one lesson in hiring is it is a process like any other.”

Q We do post-mortems on why a company isn't successful ahead of time trying to predict what could be harmful. If you do a post-mortem on Sequoia 10 years out, Of what is the reason why it may be challenged?

A I do this exercise every year. Um, and we do it as a team, not every year, but every few years at Offsites. Um, it's always the same reason. We have every advantage in the world. I'll tell you one thing that I've heard Doug say, um, to his kids or about his kids, which is, I can give my children anything in the world except for the one thing that made me who I am, which is my sense of desperation. And I think similarly being part of Sequoia, we have every advantage in the world, except for the one thing that made us who we are, which is a sense of desperation. And so the premortem for Sequoia has nothing to do with the financial markets or technology platform shifts or competitive dynamics out in the market. And it has everything to do with staying hungry, staying humble and pretending like To use the Amazon terminology, you know, behaving as if it is day one every single day, and that the default is if we don't go out there and earn it tomorrow, we are irrelevant. I think that is true, and I think as long as everybody inside the building believes that is true, and everybody inside the building behaves accordingly, we'll probably be ok. But I think every premortem begins with arrogance, Complacency. You know, taking it for granted that we get to be Sequoia tomorrow because we were Sequoia yesterday.

AI assessment note: “every premortem begins with arrogance, Complacency.”

Q What do you think is a fair versus unfair brand tip?

A The stuff that's unfair, I think, is just related to misunderstanding about how Sequoia works, and so a lot of what you read about leadership transitions and that sort of thing is out of date. You know, again, the leadership has been pretty stable in the US-Europe business for the better part of a decade. Um, the stuff that is fair is Anytime we have an investment that blows up, um, that is our responsibility. The reason limited partners trust us with their money is because they trust us to find the right investments, make the right decisions, do rigorous diligence. And there was always some other card that you could have turned over to produce a different conclusion. And so anytime an investment blows up and people give us flack for that, that that's deserved. Like that's our job. We're in the risk taking business. And so not every investment is going to work. But at the end of the day, anytime an investment fails, that's on us.

AI assessment note: “The stuff that's unfair, I think, is... The stuff that is fair is”

Q Does it have to be a counter narrative? Can it be a prevailing narrative, which is everyone sees it and we all agree, or does it have to be like a narrative violation?

A I don't think that there are any bonus points awarded for degree of difficulty. I think because there are a lot of very smart people in the world of venture capital, one currency is I'm going to be contrarian and right. And then I get to be smarter than everybody else. I don't care whether we're contrarian or not. I just want us to help the Daringfield legendary companies and generate exceptional net multiple money returns for our limited partners. And so some of the investments that I've been a part of, so for example, HubSpot back in the day, we led the series D in 2011. We would later find out that we were the only term sheet. Nobody else wanted to invest. And even inside the partnership, it was controversial. Um, Okta.

AI assessment note: “I don't care whether we're contrarian or not.”

Q Would you give yourself a 10 out of 10 for winning then?

A We don't give 10 out of tens, but I'd probably give us a nine out of 10 for winning. I think some people want to believe that because we have this nice brand, we can just waltz in and founders will hand the shares in their company. And that is far from true. Like it is an absolute knife fight every time. And we try to have a team and a culture where even if your business card meant nothing and nobody had ever heard of the name Sequoia, you could still be put in position to win because you built the sort of relationship with the founder that just makes them want to be in business with you independent of, you know, what firm you're from.

AI assessment note: “We don't give 10 out of tens, but I'd probably give us a nine”

Q You know, Andrew told me about you hiring him and Matt Huang, and you apparently, they hired, they started on the same day. That was a good process. Yeah. And like, both of them obviously have turned into a very, very brilliant investors. When you reflect back on your hiring process for hiring investors for the team, what have you learned? What do you do well?

A Andrew Reed, Matt Huang both started on our team in February of 2014. And so the process that led to them was conducted over the back half of 2013. And it was about the most rigorous hiring process we've ever had. Um, like top of funnel was 9000 and what came out the bottom of the funnel was Andrew Reed and Matt Huang, which is pretty spectacular couple of outputs. So I think one lesson in hiring is it is a process like any other. And yes, there's some art to it in terms of trying to really understand people, but there's also a lot of. Kind of science process management aspects to it, you know, just set it up to be a very efficient process so that you can, if you maximize top of funnel, that is one of the best ways to make sure that you're going to be happy with whatever comes out the other end of the funnel. Right? So I think that's probably one big point. The second big point, which is around the kind of art piece of it is. And this goes back to what we were saying earlier about how I've been trying to get better at sort of understanding people. Most of the time when you go into a hiring process, you have this list of things that you want, and you know that you're supposed to keep it short, but you end up with 17 things on the list because everybody has their pet rocks that they want to include. And you go into the hiring process and you come up with a candidate and you're ab…

AI assessment note: “So I think one lesson in hiring is it is a process like any other.”

Q We do post-mortems on why a company isn't successful ahead of time trying to predict what could be harmful. If you do a post-mortem on Sequoia 10 years out, Of what is the reason why it may be challenged?

A I do this exercise every year. Um, and we do it as a team, not every year, but every few years at Offsites. Um, it's always the same reason. We have every advantage in the world. I'll tell you one thing that I've heard Doug say, um, to his kids or about his kids, which is, I can give my children anything in the world except for the one thing that made me who I am, which is my sense of desperation. And I think similarly being part of Sequoia, we have every advantage in the world, except for the one thing that made us who we are, which is a sense of desperation. And so the premortem for Sequoia has nothing to do with the financial markets or technology platform shifts or competitive dynamics out in the market. And it has everything to do with staying hungry, staying humble and pretending like To use the Amazon terminology, you know, behaving as if it is day one every single day, and that the default is if we don't go out there and earn it tomorrow, we are irrelevant. I think that is true, and I think as long as everybody inside the building believes that is true, and everybody inside the building behaves accordingly, we'll probably be ok. But I think every premortem begins with arrogance, Complacency. You know, taking it for granted that we get to be Sequoia tomorrow because we were Sequoia yesterday.

AI assessment note: “every premortem begins with arrogance, Complacency. You know, taking it for granted”

Q Totally. No, I do get you there, and very envious of you as a seed fund. I do have to ask, what's your superpower, and what's your weakness, Pat?

A The weakness is easy. I have plenty of weaknesses. The one that I guess I'm most envious of seeing other people who are great at this is if you throw me into a cocktail party or any sort of networking event, that's like my nightmare. The people who can work the room and, you know, seem to be friends with everybody and just have a magical touch with other people, that's never been my forte, and I just admire People who are so good at that. As far as strengths go, there was a good quote from Harry Truman that somebody brought up the other day, which was, it's amazing what you can accomplish when you don't care who gets the credit. And I think that really resonated with me because I've always had sort of a desperate need to win, but that's never been at the expense of other people. And so my number one objective, and this kind of goes back to Boston college and the Jesuit tradition of men and women for others. Like my number one objective has always been for The team and the ecosystem around me to win. Whether or not I'm the one who takes the shot with two seconds left on the clock, so to speak, just doesn't matter. I just want the team to win, and Sequoia is an environment in which that mentality can thrive.

AI assessment note: “The weakness is easy... As far as strengths go”

Q No, I do get you. Can I ask again, very unfair of me in terms of off schedule. You mentioned the extended period of privatization. How do you think about that today at Sequoia? And does that actually naturally play into your strategy with the larger funds?

A Everything that we do here is reverse engineered off of that mission. And so again, we want to help the daring build legendary companies from idea to IPO and beyond. If founders want to stay private longer, then we'll end up raising vehicles that can support them when they're at pretty decent scale. So it all comes from what the founders want to do. A related question, people ask, how do you advise your companies around IPOs? Different founders have different reasons to go public or not go public. I think at the end of the day, to steal a line from Frank Sloopman, who is the CEO of ServiceNow and recently became CEO of Snowflake, accountability brings out the best in people. And I think that at some point, it's good for most companies to be public companies because that does Have a higher level of accountability and transparency. And I do think that that helps to bring out the best in people.

AI assessment note: “If founders want to stay private longer, then we'll end up raising vehicles”

Q the caption for the episode itself. Listen, Pat, you know my respect for you, and so I do want to take the chance while I have it to do a Pat AMA. Essentially, I'm going to ruthlessly use the show to learn from you. So my first question is, I've just gained my first institutional board seat. You've sat on some incredible boards. What would your advice be to me?

A First, congratulations. That's awesome. You have a very bright future ahead, so this is the first of many, I'm sure. As far as advice goes, I would kind of start with the basics, and I think the basics are your job as a board member, first and foremost, is to build trust and to listen. And if you do not have the trust of the team or the other board members, and if you have not listened to what's really happening inside of the business, Then there's no foundation on top of which you can build a relationship or hope to be useful to the company. And so I would almost go no further than build trust and listen. And once you've nailed that, then maybe we can move on to the rest of it.

AI assessment note: “your job as a board member, first and foremost, is to build trust and to listen.”