The Exchanges

Q knowing about and wading into. And I spoke to Victoria Felicis, who you obviously worked with. She said that you once told her the market always wins. And I've had so many guests on the show who say, it's all about the founder. It's all about the founder. It's the only thing that matters. We both say this all the time. How do you weigh markets? How important are they?

A Yeah, the market always wins. I hate to say it, right? But the, but it is also true that the founder is equally as important. I have found, you know, I've, I've watched founders who don't have a good sense of the market, but they're brilliant founders. And They launch a product that the market isn't ready for, and then it goes to zero. It's a money loss, right? A market will beat out a great founder, but the best founders understand how to adapt to the market and find the bigger piece, right? Like it's, it's sort of how Cliff and Mel were misunderstood. Oh, a lot of people passed on them because they said, oh, I don't, I don't get the market, right? You're a Photoshop competitor. They're more funded. You know, only so many people are using Photoshop and the market back then of people who use Photoshop were like professional designers, right? Or like people who were like advanced and would, were willing to take a class mills actually unique insight because she was like a yearbook teacher. In her, in her, uh, in her high school was that like, you know, people shouldn't be taking four years of yearbook class so that they can like, you know, learn how to use Adobe products so that they can build, you know, your book in the last and final year of high school. Right. And she said like, there's gotta be something easy where like you could get started just by like logging in and not ha…

AI assessment note: “the market always wins. I hate to say it, right? But... the founder is equally as important.”

Q Do you feel boards do add value though generally?

A It depends on the board, right? Like the one on camera adds lots of value, or at least I think it does, right? You're going to have to, you're going to have to ask Cliff and Mel that, but it's a small board with me and Rick Baker and the two founders. And we have really wonderful, lovely discussions about, you know, how they want to move forward and what their hundred year plans are. If it was a 20 person board, we would not have those discussions. Then I'm on some boards that have like 10, 15 people on there. You know, I sort of sit there and I just like sort of, you know, go to the board meeting. I'm like, ooh, like I'd rather not be here, right? Because like, you know, I've been There's not much value that the board has and everybody has a different opinion and the founder spends more time managing it. This is really up to the founder for me. Like I'm only, I'm only willing to do it if the founder wants it. Right.

AI assessment note: “It depends on the board, right?”

Q Final question for you. You're a learning machine. I know you're a concert pianist and, uh, a complete rock star on the piano, among many other things. What's your learning process, Wesley?

A Boy, you know, I hired, I tried to hire a piano teacher and, uh, you know, it was a disaster. They, you know, you have to learn the scales, you learn to shoot music. And I said, I just want to learn Chopin. And, um, Yeah, nobody would teach me that, so I learned, uh, I basically learned using a, using YouTube, and then, uh, so you learn that there's two things, um, That, that, that I sort of broke down the learning process into. One was, um, the mechanics of it and the technicality. Where do I put my fingers, and how do I, and, you know, for how long? So you, you learn that on YouTube, you figure out the fingering for it, you like, you know, practice one hand at a time, you get that right. And then the second piece of it is the mastery of it. Like, you know, some of the world's best artists, Arthur Rubenstein, Garrick Olson, how do they play it, right? And like, what is the nuances that they do To master the piece. And so like, you know, we have all this stuff in Chopin, which is, you know, very emotive Roboto, which is, you know, that's the, that's the whole timing element where you robbed in the past, um, to give to the future, uh, you know, so the timing isn't consistent. Isn't just like one, two, three or mechanical and you listen to them play it. And then you duplicate as much as you can in their timing and then their emotive sense. And then you learn those two things toge…

AI assessment note: “two things, um, That, that, that I sort of broke down the learning process into.”

Q Do you not think that things change so much that actually planning so far out, it can almost be futile. Do you not? And I almost think sometimes it can be limiting.

A Oh, that's true for my life, right? It's true for my life. I don't plan more than three years, you know, in advance. And I don't even plan more than three days in advance. Like half the time people ask me to like commit to these vacations or dinner parties. And I have no idea what the future will hold for me. Right. But the truly visionary founders, Larry and Sergey, Cliff and Mel at Canva, you know, Brian Peterson at Flexport, they have a hundred year plans. They may not, it may not, it may not work out the way they envisioned it to, but they know what the world looks like in a hundred years, and they plan to go build a company, you know, adapt it and make that happen, right? That is the big difference. They know.

AI assessment note: “truly visionary founders, Larry and Sergey, Cliff and Mel at Canva... have a hundred year plans.”

Q knowing about and wading into. And I spoke to Victoria Felicis, who you obviously worked with. She said that you once told her the market always wins. And I've had so many guests on the show who say, it's all about the founder. It's all about the founder. It's the only thing that matters. We both say this all the time. How do you weigh markets? How important are they?

A Yeah, the market always wins. I hate to say it, right? But the, but it is also true that the founder is equally as important. I have found, you know, I've, I've watched founders who don't have a good sense of the market, but they're brilliant founders. And They launch a product that the market isn't ready for, and then it goes to zero. It's a money loss, right? A market will beat out a great founder, but the best founders understand how to adapt to the market and find the bigger piece, right? Like it's, it's sort of how Cliff and Mel were misunderstood. Oh, a lot of people passed on them because they said, oh, I don't, I don't get the market, right? You're a Photoshop competitor. They're more funded. You know, only so many people are using Photoshop and the market back then of people who use Photoshop were like professional designers, right? Or like people who were like advanced and would, were willing to take a class mills actually unique insight because she was like a yearbook teacher. In her, in her, uh, in her high school was that like, you know, people shouldn't be taking four years of yearbook class so that they can like, you know, learn how to use Adobe products so that they can build, you know, your book in the last and final year of high school. Right. And she said like, there's gotta be something easy where like you could get started just by like logging in and not ha…

AI assessment note: “Yeah, the market always wins. I hate to say it, right?”

Q So how important is ownership then, and then would it not be better for you to do five to seven million dollar checks and write 45 to 50 of them and have that diversification?

A Well, if, you know, Series A rounds were done at five to seven million dollars, I would totally do it, right? But like, you know, most of them aren't. Like you have to, we have a four hundred and fifty million dollar fund so we can write and back founders all the way, right? Like the capital that we have is, uh, is designed for us to sort of go to the founder and say, if you're raising fifteen million, we're here to back you for 15. If you want to raise five, we'll do five, right? Like, you know, we're, we, there's no hard and fast rule that I subscribe to. It's another thing I learned from, you know, I didn't, uh, you know, Felice is like, you know, we, we, we get into the best companies and we do what we can to get into the best companies. We don't go and have dogma. Like, you know, I, I did not have 20% ownership of Canva when I led the Series A. I did not have a board seat. In fact, so many people said no to them because they said, we're not giving you a board seat. Or they said, we're not giving you 20% ownership. Or they said, we're not going to do X, Y, and Z. And remember the dogma back then in 2014 when we were discussing the deal was 20% ownership in a company located close to you, not run by a romantically involved team. And a board seat. And basically we didn't get any of that from Canva. And I, you know, I was one of the few people that said, in fact, the only pers…

AI assessment note: “if, you know, Series A rounds were done at five to seven million dollars, I would”

Q I totally agree with you. Um, can I ask, we, we've spoken and we've heard a lot about Canva. I think you also learn a lot from misses. When you think back to your misses, what's the most prominent one for you? And what, how did that change you as an investor?

A I think, um, You know, I've had, I've had quite the anti portfolio, right? Like, uh, one of my big misses was Twilio, you know, Jeff Lawson. Um, you know, I was the founder of Google voice and, you know, had built that for multiple years and knew a lot about telecom. And he kind of said, it's like, oh, I'd love to have, you know, the, the Google voice. Um, founder, my cap table, would you invest? Uh, and this was at the seed round, right? Like when I was at GV and he's like, uh, you know, and I passed on it because, you know, I looked at it and, you know, talked to my, my team at Google voice and everybody looked at it. It's like, oh, this is easy to do. Like, you know, once the company gets big enough, they don't need toilet anymore. Boy, I didn't understand how much he would evolve the product, how much he would change. That was a big miss. My, my, um, my lesson learned on that one. And, you know, many of my other misses is that when you're an expert in the area, You know, too much and everything becomes hard as a not invented here syndrome, especially if you're a classically trained engineer. And so, you know, my best investments like Canva or some of my life science investments, right. You know, Orca bio or, or zealous or, or, uh, or, or, uh, you know, these, these amazing life science companies I've had the chance to be part of, like, if you don't just enough to be dangero…

AI assessment note: “one of my big misses was Twilio... My lesson learned on that one”

Q Final question for you. You're a learning machine. I know you're a concert pianist and, uh, a complete rock star on the piano, among many other things. What's your learning process, Wesley?

A Boy, you know, I hired, I tried to hire a piano teacher and, uh, you know, it was a disaster. They, you know, you have to learn the scales, you learn to shoot music. And I said, I just want to learn Chopin. And, um, Yeah, nobody would teach me that, so I learned, uh, I basically learned using a, using YouTube, and then, uh, so you learn that there's two things, um, That, that, that I sort of broke down the learning process into. One was, um, the mechanics of it and the technicality. Where do I put my fingers, and how do I, and, you know, for how long? So you, you learn that on YouTube, you figure out the fingering for it, you like, you know, practice one hand at a time, you get that right. And then the second piece of it is the mastery of it. Like, you know, some of the world's best artists, Arthur Rubenstein, Garrick Olson, how do they play it, right? And like, what is the nuances that they do To master the piece. And so like, you know, we have all this stuff in Chopin, which is, you know, very emotive Roboto, which is, you know, that's the, that's the whole timing element where you robbed in the past, um, to give to the future, uh, you know, so the timing isn't consistent. Isn't just like one, two, three or mechanical and you listen to them play it. And then you duplicate as much as you can in their timing and then their emotive sense. And then you learn those two things toge…

AI assessment note: “two things, um, That, that, that I sort of broke down the learning process into.”

Q there's no more exciting time than those really, really early days. I do want to start, I spoke to Don Stalter before the show, a mutual friend of ours. He said that I had to ask this one, which was in terms of the very early days at Google, working with Larry and Sergey in particular, what are the one to two significant product insights you have from that time?

A Yeah, it was, it was really interesting. I still remember pitching Google Analytics and working on the ad system early on, and they'd just look at me and say, why are you wasting your time on this? Um, They always would push me and say, Wesley, you got to go work on something that changes the world. Life is too short. This is not big enough. And you know, when you're 21 and you sort of hear this, like you just, like your heart just breaks, right? You're sitting there going, I've just spent the last like two weeks coming up with this proposal and doing all this research. And you're like, you know, at this executive meeting with Larry and Sergey, the founders of, of the company, and they just poopoo the whole idea and say, it's not big enough. And that was the most, you know, amazing, um, experience. It's stung in the moment, but it's, you know, one of the most defining moments where I look at this and go, is this big enough? To go change the world. Is this something worthy of, you know, Google and worthy of my time at Google, right? Um, and it was one of those things where every time I would bring them a, um, a product or I work with, or mentor other product managers or mentor other engineers that would, you know, sort of say, I want to go build this. I just look at this. I'm like, you know, Larry's going to rip you apart and ask the question, is this big enough for the world? A…

AI assessment note: “Larry's going to rip you apart and ask the question, is this big enough”

Q Do you not think that things change so much that actually planning so far out, it can almost be futile. Do you not? And I almost think sometimes it can be limiting.

A Oh, that's true for my life, right? It's true for my life. I don't plan more than three years, you know, in advance. And I don't even plan more than three days in advance. Like half the time people ask me to like commit to these vacations or dinner parties. And I have no idea what the future will hold for me. Right. But the truly visionary founders, Larry and Sergey, Cliff and Mel at Canva, you know, Brian Peterson at Flexport, they have a hundred year plans. They may not, it may not, it may not work out the way they envisioned it to, but they know what the world looks like in a hundred years, and they plan to go build a company, you know, adapt it and make that happen, right? That is the big difference. They know.

AI assessment note: “Oh, that's true for my life ... But the truly visionary founders ... have a hundred year plans.”

Q I totally agree with you. Um, can I ask, we, we've spoken and we've heard a lot about Canva. I think you also learn a lot from misses. When you think back to your misses, what's the most prominent one for you? And what, how did that change you as an investor?

A I think, um, You know, I've had, I've had quite the anti portfolio, right? Like, uh, one of my big misses was Twilio, you know, Jeff Lawson. Um, you know, I was the founder of Google voice and, you know, had built that for multiple years and knew a lot about telecom. And he kind of said, it's like, oh, I'd love to have, you know, the, the Google voice. Um, founder, my cap table, would you invest? Uh, and this was at the seed round, right? Like when I was at GV and he's like, uh, you know, and I passed on it because, you know, I looked at it and, you know, talked to my, my team at Google voice and everybody looked at it. It's like, oh, this is easy to do. Like, you know, once the company gets big enough, they don't need toilet anymore. Boy, I didn't understand how much he would evolve the product, how much he would change. That was a big miss. My, my, um, my lesson learned on that one. And, you know, many of my other misses is that when you're an expert in the area, You know, too much and everything becomes hard as a not invented here syndrome, especially if you're a classically trained engineer. And so, you know, my best investments like Canva or some of my life science investments, right. You know, Orca bio or, or zealous or, or, uh, or, or, uh, you know, these, these amazing life science companies I've had the chance to be part of, like, if you don't just enough to be dangero…

AI assessment note: “one of my big misses was Twilio... My lesson learned on that one”

Q to a certain size. I find this is a big investment mistake that people make, and that you could make it with a number of companies. Algolia as well, I know a lot of people did the same. Like, do you agree with me in terms of that? And how do you get over that? Oh, well, actually, when a company reaches a certain scale, they'll scale out of it.

A It's, uh, my comfort level on getting over that is you really have to truly understand, this goes back to that thing about building products and not features, right? The founder's vision and the hundred-year plan. Like what, what my biggest lesson learned on investing is that what you see today is not what, if the founder truly visionary will not be what the company is a year or two years or five or 10 years from then. So you have to really believe that the founder is capable of morphing the company and the set of products into something that's truly incredible. That's the piece that I spend most time doing. I don't ask them about what the product is today or all the problems or issues that customers have. In fact, like a lot of time I'll do customer references just to understand what the limitations are. But like, you know, my, my, my, my early lessons of investing, Where the, you know, and I miss out on quite a few companies because I, I listen to customer references and listen to them bag or hate the product, and I was like, ooh, we can't invest in this. Customers hate it. Um, it really, this goes back to the founders. This is a founder, truly one of those incredible product visionaries that's capable of morphing both the company and the product into something that's truly visionary. Now, can you imagine meeting Elon Musk and thinking about Tesla when he only had the roadste…

AI assessment note: “my comfort level on getting over that is you really have to truly understand”

Q there's no more exciting time than those really, really early days. I do want to start, I spoke to Don Stalter before the show, a mutual friend of ours. He said that I had to ask this one, which was in terms of the very early days at Google, working with Larry and Sergey in particular, what are the one to two significant product insights you have from that time?

A Yeah, it was, it was really interesting. I still remember pitching Google Analytics and working on the ad system early on, and they'd just look at me and say, why are you wasting your time on this? Um, They always would push me and say, Wesley, you got to go work on something that changes the world. Life is too short. This is not big enough. And you know, when you're 21 and you sort of hear this, like you just, like your heart just breaks, right? You're sitting there going, I've just spent the last like two weeks coming up with this proposal and doing all this research. And you're like, you know, at this executive meeting with Larry and Sergey, the founders of, of the company, and they just poopoo the whole idea and say, it's not big enough. And that was the most, you know, amazing, um, experience. It's stung in the moment, but it's, you know, one of the most defining moments where I look at this and go, is this big enough? To go change the world. Is this something worthy of, you know, Google and worthy of my time at Google, right? Um, and it was one of those things where every time I would bring them a, um, a product or I work with, or mentor other product managers or mentor other engineers that would, you know, sort of say, I want to go build this. I just look at this. I'm like, you know, Larry's going to rip you apart and ask the question, is this big enough for the world? A…

AI assessment note: “They always would push me and say, Wesley, you got to go work on something that changes the world.”

Q Every GP is telling their LPs now is the best time to be investing. Now is the best time to be investing. Um, and I'm intrigued. Do you actually agree with that? Or do you think we still.

A No, it's the best time to have a fund. It's not the best time to be investing, right? There's a lot of treacherous deals out there. Like, I don't know when, when, when there's these market corrections, uh, what winds up happening is a credit and capital market sees up a little bit. Right. And so the challenge is, you know, you have no idea who's going to write Another check into your company. And so you might be the last check into that company. And so it's very treacherous. Like you imagine finding like some company that has four months of cash left. Right. And like, you know, you're, you have a, a 25 or thirty million dollar fund. And you say, oh, I love what you're doing. Let me go write a four million dollar check in your company or whatnot and concentrate capital in there. And then, you know, that, that, the last 12 months and, you know, the markets are still seized up then because who knows how long this last, you know, money policy isn't, you know, funding more capital into the markets. So, you know, things are, VCs are still sort of skittish and waiting for the markets to reprice. So a lot of them aren't doing deals. And then the founder comes back to you 12 months from now. It's like, I'm out of cash again. You just put four. I need another four. What are you going to do? Nobody else is knocking, you know, giving, returning any phone calls to the founders. It's treache…

AI assessment note: “No, it's the best time to have a fund. It's not the best time”

Q lot more people involved and included. And then there's what I call like market theft, which is like, um, almost Robin Hood-like. In some ways, you could say that's market expansion, but neobanks would involve a lot of that, which is like, it's Stealing customers from incumbents because they provide shitty services that are outdated in many ways. Do you have a preference for which type of market you favor?

A So I love all three of them. Um, but where I've, where I've, um, where I've done the best, uh, is when founders come to me and say, oh, like this market doesn't exist yet, and we're going to make it happen. That's, that's, that's, that's the goal, right? Like, you know, when you, when you have a founder that has unique insight and says, like, I can create this, the time is right, the technology's right, I have the people on my back to go make this happen, and then go create the market, right? That's where, that's where, that's where the upside is. I mean, like, my, my, my outlier returns, uh, the companies, um, that I've had the privilege of working with, um, Are ones that create new markets. Now that said, you know, I've got quite a few companies that I've done well on, you know, like what you call the market theft, right? Like look at Gusto, you know, look at the incumbents that they were working against. It was terrible. Payroll was, you know, hideous. And they said like, we're going to create a better experience, you know, four dollars a month per user. And, and, and, and, and they've nailed it, right? Like every small business I know is using Gusto. We use it. So it's one of those things where, where I, um, You know, there's ways to win in all three, but the ones that, you know, I, I, I've had the best, uh, success in are, are ones where we create new markets, but that doe…

AI assessment note: “where I've done the best, uh, is when founders come to me and say, oh, like this market doesn't exist yet”

Q Do you feel boards do add value though generally?

A It depends on the board, right? Like the one on camera adds lots of value, or at least I think it does, right? You're going to have to, you're going to have to ask Cliff and Mel that, but it's a small board with me and Rick Baker and the two founders. And we have really wonderful, lovely discussions about, you know, how they want to move forward and what their hundred year plans are. If it was a 20 person board, we would not have those discussions. Then I'm on some boards that have like 10, 15 people on there. You know, I sort of sit there and I just like sort of, you know, go to the board meeting. I'm like, ooh, like I'd rather not be here, right? Because like, you know, I've been There's not much value that the board has and everybody has a different opinion and the founder spends more time managing it. This is really up to the founder for me. Like I'm only, I'm only willing to do it if the founder wants it. Right.

AI assessment note: “It depends on the board, right? Like the one on camera adds lots of value”

Q to a certain size. I find this is a big investment mistake that people make, and that you could make it with a number of companies. Algolia as well, I know a lot of people did the same. Like, do you agree with me in terms of that? And how do you get over that? Oh, well, actually, when a company reaches a certain scale, they'll scale out of it.

A It's, uh, my comfort level on getting over that is you really have to truly understand, this goes back to that thing about building products and not features, right? The founder's vision and the hundred-year plan. Like what, what my biggest lesson learned on investing is that what you see today is not what, if the founder truly visionary will not be what the company is a year or two years or five or 10 years from then. So you have to really believe that the founder is capable of morphing the company and the set of products into something that's truly incredible. That's the piece that I spend most time doing. I don't ask them about what the product is today or all the problems or issues that customers have. In fact, like a lot of time I'll do customer references just to understand what the limitations are. But like, you know, my, my, my, my early lessons of investing, Where the, you know, and I miss out on quite a few companies because I, I listen to customer references and listen to them bag or hate the product, and I was like, ooh, we can't invest in this. Customers hate it. Um, it really, this goes back to the founders. This is a founder, truly one of those incredible product visionaries that's capable of morphing both the company and the product into something that's truly visionary. Now, can you imagine meeting Elon Musk and thinking about Tesla when he only had the roadste…

AI assessment note: “my comfort level on getting over that is you really have to truly understand”

Q talking about the kind of Target market being everyone. Is there not kind of inherent difficulties with that going against the traditional view that we should focus on particular segments of the market and hone in on niches, because that way we can tailor the product to those particular people. Does that not go against it and make it more challenging having such a broad market that you're going after?

A Oh, of course it makes it challenging, right? Like everybody thought about building analytics for IT people or for sort of like skilled analyst people. And we built Google Analytics for, you know, anybody that wanted to build a website so that they could see what was happening and make great decisions if they were deciding to, you know, buy advertising. And I think that's the same thing that Cliff and Melanie sort of have with Canva, right? Which is, you know, I don't think we should just build a powerful design tool for designers. We want to build it for anyone that wants to go build design because design is something that everybody does, not just the privileged few. So I think that that's a, that's a very powerful statement. And by the way, it also increases your market by an order of a hundred extra more, right? You know, we're, You know, Adobe's building Photoshop for probably hundreds of thousands of people who want to, who are skilled or want to make design their profession, and that's great. You know, they're a multi-billion dollar company for doing that, but imagine if you can sort of build that functionality into something that a billion people or more can use, and therefore your market starts increasing to factors of a hundred, and imagine how much bigger your business could ever be than Adobe or for any of these other companies that are building tools only for a nich…

AI assessment note: “Oh, of course it makes it challenging, right?”

Q Absolutely. And then working with Larry Page, what was that like, Larry and Sergey?

A Oh, you know, it was an absolute delight. It's a privilege and one of those rare experiences that's, you know, you'll never sort of ever, that I always sort of deeply appreciate. And, you know, the thing I remember most about Larry, even when I was building Google Analytics or building Google Voice, he would look at me and say, why are you spending your time on this? And he didn't, he would never say that to be mean-spirited, but it was just a very honest question to say, are you working on the thing that's most important for the world? Is this worth your time? You only have so much, you know, you only have so many years on this planet that you're spending. Is this really the thing that you want to be working on? And that would always sort of get me thinking, you know, am I building something big enough? Am I building something That has enough of an impact on the world and does what I'm doing really matter? And that's sort of what's informed my thinking in terms of why I like to change things every three years is once it's successful, is this really where I wouldn't be spending my time or should I be spending my time on finding something that could be another big success and be highly impactful on the world? And, uh, you know, Larry was very, very deeply integral in that philosophy that I've sort of had in terms of just choosing what I want to spend my time to work on.

AI assessment note: “Oh, you know, it was an absolute delight. It's a privilege”

Q And I'm really pleased you said about delightful there, because you've said before that you look for patterns similar to Google Analytics in the way of building something great and delightful that's easy to use and the market will embrace. So I'm really intrigued what those patterns are that are similar to Google Analytics. And what that thought process has led you to in terms of outcome?

A Yeah, the key takeaway there on Google Analytics is that you want to, there's a certain thing that I call the democratization of technology. You see this pattern where you build these tools that only experts can use, you know, sort of these people that are trained for, for, for 10 years or five years that, you know, get very good at their craft and these very, very complicated tools. You know, most people cannot Understand how to use. And analytics back when I started looking at it was that exactly that way. There would be these very complicated packages. You know, there was a company called Omniture that was building, you know, a really sort of a powerful analytics tool, but the keyword was very, very powerful. It was like, it was like you walking to a machine shop and looking at all these, you know, sort of amazing tools like a CNC machine or a water jet, looking at that. It's like, holy cow, I can do so many amazing things with this, but how the hell do I use this? And you know, I remember when I sort of first saw my machine shop, I sort of said, oh my goodness, I'm very intimidated. Then it took me almost six months to go through that training when I was at MIT and when I was at HP labs to really understand how to use those tools. But like your normal everyday person can't figure out how to use a water jet. Like you can really literally hurt yourself. Right. And so I think …

AI assessment note: “there's a certain thing that I call the democratization of technology.”

Q Cliff, actually, um, at, uh, Canva, I mean, we had such a great chat about you, but he asked the question, which was, what are non-obvious learnings for founders to think about navigating hypergrowth?

A Uh, it's really... The empathy that they have with their employees, right? You know, the best founders like Cliff and Mel have massive empathy with their employees, especially if you're growing. Cause you can imagine, like, you know, you were walking into the company. I went through this firsthand, you know, when I was at Google where the company was doubling every, every, uh, every, every two months. And, you know, you can just imagine how unfrazzled everybody gets, you know, in a business where like it just keeps growing and you're like, every day is different and you walk in and it's uncertain. And so you just have to have an empathy with your employees and truly understand that, that they're going through their own journey and they've joined you. On that journey, and if you can demonstrate, communicate, and understand, have that empathy, like, you know, you can go, you can go to the moon and back.

AI assessment note: “The empathy that they have with their employees, right?”

Q Cliff, actually, um, at, uh, Canva, I mean, we had such a great chat about you, but he asked the question, which was, what are non-obvious learnings for founders to think about navigating hypergrowth?

A Uh, it's really... The empathy that they have with their employees, right? You know, the best founders like Cliff and Mel have massive empathy with their employees, especially if you're growing. Cause you can imagine, like, you know, you were walking into the company. I went through this firsthand, you know, when I was at Google where the company was doubling every, every, uh, every, every two months. And, you know, you can just imagine how unfrazzled everybody gets, you know, in a business where like it just keeps growing and you're like, every day is different and you walk in and it's uncertain. And so you just have to have an empathy with your employees and truly understand that, that they're going through their own journey and they've joined you. On that journey, and if you can demonstrate, communicate, and understand, have that empathy, like, you know, you can go, you can go to the moon and back.

AI assessment note: “The empathy that they have with their employees, right?”

Q Every GP is telling their LPs now is the best time to be investing. Now is the best time to be investing. Um, and I'm intrigued. Do you actually agree with that? Or do you think we still.

A No, it's the best time to have a fund. It's not the best time to be investing, right? There's a lot of treacherous deals out there. Like, I don't know when, when, when there's these market corrections, uh, what winds up happening is a credit and capital market sees up a little bit. Right. And so the challenge is, you know, you have no idea who's going to write Another check into your company. And so you might be the last check into that company. And so it's very treacherous. Like you imagine finding like some company that has four months of cash left. Right. And like, you know, you're, you have a, a 25 or thirty million dollar fund. And you say, oh, I love what you're doing. Let me go write a four million dollar check in your company or whatnot and concentrate capital in there. And then, you know, that, that, the last 12 months and, you know, the markets are still seized up then because who knows how long this last, you know, money policy isn't, you know, funding more capital into the markets. So, you know, things are, VCs are still sort of skittish and waiting for the markets to reprice. So a lot of them aren't doing deals. And then the founder comes back to you 12 months from now. It's like, I'm out of cash again. You just put four. I need another four. What are you going to do? Nobody else is knocking, you know, giving, returning any phone calls to the founders. It's treache…

AI assessment note: “No, it's the best time to have a fund. It's not the best time to be investing”

Q So how important is ownership then, and then would it not be better for you to do five to seven million dollar checks and write 45 to 50 of them and have that diversification?

A Well, if, you know, Series A rounds were done at five to seven million dollars, I would totally do it, right? But like, you know, most of them aren't. Like you have to, we have a four hundred and fifty million dollar fund so we can write and back founders all the way, right? Like the capital that we have is, uh, is designed for us to sort of go to the founder and say, if you're raising fifteen million, we're here to back you for 15. If you want to raise five, we'll do five, right? Like, you know, we're, we, there's no hard and fast rule that I subscribe to. It's another thing I learned from, you know, I didn't, uh, you know, Felice is like, you know, we, we, we get into the best companies and we do what we can to get into the best companies. We don't go and have dogma. Like, you know, I, I did not have 20% ownership of Canva when I led the Series A. I did not have a board seat. In fact, so many people said no to them because they said, we're not giving you a board seat. Or they said, we're not giving you 20% ownership. Or they said, we're not going to do X, Y, and Z. And remember the dogma back then in 2014 when we were discussing the deal was 20% ownership in a company located close to you, not run by a romantically involved team. And a board seat. And basically we didn't get any of that from Canva. And I, you know, I was one of the few people that said, in fact, the only pers…

AI assessment note: “We don't go and have dogma.”

Q What is the most contrarian opinion you have on the venture space today?

A Uh, you know, it's probably, I was one of the first to like boohoo crypto. Um, you know, some of it's unwell, but like I said, like, I can't be involved in a bunch of stuff where like, I think more than three quarters of it is scammy. I, you know, like I said, I managed children's hospital money. And last thing I want to do is like, oh, I'm sorry. I lost your money in a scam. And we, we, we, we, we, we took, we took advantage of a bunch of little old ladies. Um, that's contrarian. A lot of people thought it was crazy when they said that. And, you know, some of us coming home the roost now, as we see Celsius and Voyager and some of these other companies, like Really take, you know, a lot of retail investors and a lot of them, you know, folks that aren't very wealthy or don't have much money or, you know, they took their life savings and ran off with it. It's terrible.

AI assessment note: “I was one of the first to like boohoo crypto.”

Q What is the most contrarian opinion you have on the venture space today?

A Uh, you know, it's probably, I was one of the first to like boohoo crypto. Um, you know, some of it's unwell, but like I said, like, I can't be involved in a bunch of stuff where like, I think more than three quarters of it is scammy. I, you know, like I said, I managed children's hospital money. And last thing I want to do is like, oh, I'm sorry. I lost your money in a scam. And we, we, we, we, we, we took, we took advantage of a bunch of little old ladies. Um, that's contrarian. A lot of people thought it was crazy when they said that. And, you know, some of us coming home the roost now, as we see Celsius and Voyager and some of these other companies, like Really take, you know, a lot of retail investors and a lot of them, you know, folks that aren't very wealthy or don't have much money or, you know, they took their life savings and ran off with it. It's terrible.

AI assessment note: “I was one of the first to like boohoo crypto... three quarters of it is scammy”

Q Now, I want to get the ball rolling today by, by finding out how you made your move from the world of Google to Felicis. And so what was it about Felicis and VC that enticed you also?

A I had a really fantastic, uh, almost thirteen-year run at Google. Uh, you know, I started out there as a product manager, helping to sort of write the early ad system. Uh, it sort of went through my life Building great products there. I stumbled upon this example of sort of people not really understanding how to measure their ads and wound up starting and founding Google Analytics. I brought in a great company called Urchin Software. Same thing happened in terms of the voice area. Skype was sort of making a big inroad at that point, and Larry said, maybe you should think about what people should do on the phone and real-time communications. So I wound up and found a company called Grand Central and brought them in and helped them Uh, build Google voice and started that. Uh, and then, uh, when I was ready to sort of leave Google, uh, you know, Larry sort of came along and said, hey, you know, we're starting a venture fund, uh, and, uh, it, uh, it would be great to sort of have you involved somewhere. So I was sort of one of the very early partners at Google ventures and sort of helped build up Google ventures and sort of spent five years, uh, investing on behalf of Google. You know, no one knew what venture was at Google and no one really understood why even Google would have a venture fund. And today they've done over 300 investments and it's grown to be a five hundred million …

AI assessment note: “after 12 years at Google, you get a little restless.”

Q Final one, my friend, what are the next five years for you and for FPV? If we have this conversation in five years time, what does FPV look like? Where are you at?

A Um, there's, you know, I always do this planning exercise with my founders, you know, write down the things you want to be true in five years, and I wrote down, like, three things that I want to be true. One, we remain a small team. Two, we have a family of founders who, you know, vehemently tell everybody else we're their first phone call, and that, like, you know, any time of a problem, whether it's, like, a therapy issue or, like, a fundraising problem or a product issue, Wesley and Pega are my, my, um, my, one of my first phone calls, and, you know, you guys need to work with them because, you know, they'll be one of your first phone calls, too, uh, And then the last thing that I sort of say is that, uh, you know, we, everybody on our team continues learning and like, you know, understanding truly like what, what, what brings them fulfillment. Like we started this firm so that everybody that works with us can be fulfilled on what they do, not because, you know, the money is always secondary. And like one of our core values is that we want people to be fulfilled and, you know, we want our founders to be fulfilled in what they do as well. The money is always secondary.

AI assessment note: “write down the things you want to be true in five years”

Q 10 to 20. How do you feel? I have Brian Singerman on the show from Founders Fund. He said capital concentration limits are the enemy of great fund returns. Do you agree? And how do you think about capital concentration on a per company basis?

A Uh, you know, I, I actually look at it slightly differently. And this is something I learned from my dear friend at Felicis, which is we like more shots on goal. Like if you're in some company like Canva, right, you'll return 10 X plus the fund easily, but you have to be in a company like Canva. And so, so the more you concentrate, unless into companies, the less chance you have of finding companies like Canva. That's the, that's, that's my strategy, right? Like, you know, and I started, you know, I helped to start the seed fund at GV. So, and I didn't also, you know, started Felicis as a seed fund. And so he and I have this preference for having more great companies in the fund. Then, and, and we can always concentrate capital later on through, through other vehicles, right? You know, you're, you, you're quite, you're quite an expert at, at understanding, you know, the, some of those, those strategies in place, but like, we'd rather have more core positions that we give more shots on goal than, than to, than to, um, then to sort of say like, I'll do three companies and like, you know, pray that one of the three companies works, right? Like, you know, I'm, uh, if you do the odds, uh, in, in this business, you have to have just enough to get high confidence of returning. You know, I studied Electrical engineering when I was at MIT, like, you know, when you study statistics then,…

AI assessment note: “we'd rather have more core positions that we give more shots on goal”

Q Is it multi-stage? Is it multi-geo?

A It can be multi-stage. It's multi-geo, multi-stage. I mean, you know, the only thing we're not touching right now is crypto. Um, You know, the founders, you know, look, my best company that I've had the privilege of working with is Canva, which is located in Sydney. And it was, you know, an NGO that wasn't obvious when, you know, I, I, I, I, I, I led that deal at Felicis. Right. And so You never know where the world's most amazing founders will come from or where they live or where they might be hiding or where that, what they might be doing. Like you go, this is a business of pleasant surprises. You just have to keep an open mind. But when you find that and you've spot that amazing and amazing fountain, that's going to be the next Larry is Sergey or Cliff or Mel at Canva. Like, you know, you kind of sit there and go like, I want to work with you. Let's make it easy for you to say yes. And so if, you know, if I was again, I'm not dogmatic, right? I don't say I have to own. Um, 20% ownership or, you know, be only in the U S or be in places where I have to be able to drive to, I'm willing to, you know, like some of my best companies, like I said, are in sectors that, you know, people like, I don't understand why you're in it. Sometime, you know, there's this joke that, you know, my, my old firms and that some of my colleagues would have that, you know, and in fact, Don calls it s…

AI assessment note: “It can be multi-stage. It's multi-geo, multi-stage.”