Sequoia Capital's Doug Leone on Luck & Taking Risks

Well, we are all very happy to have you here today, welcome to the GSB, thank you. I remember one of the first times we talked when you were talking about coming here and you asked me if this was a forum where you could quote yourself. quote, provocative and at the same time we recognize that some members of his family are in the audience today and we don't want to cross the line too much. um I want to make sure I give you the opportunity to go a little further. In the next 40 minutes or so we're going to cover a few topics.

I want to talk about your leadership at seoa and how you got to the point where you are today and the Silicon Valley ecosystem as a whole, as you mentioned before. a lot of EOS, there's a lot of confusion about it, but first I want to talk about what makes you who you are and your background. The dean talked a lot about you coming here as an immigrant at the age of 11 working at Blue. Neck jobs and promises of success in business um Forbes wrote Leone still acts like a down-on-his-

luck

driver fighting for his first decent break and you said a lot of what keeps you going is fear so tell me a little more about that experience coming here. as an immigrant and why that drives you today and how that shapes you as a person today, you know, it's pretty funny when I think about all the seemingly very small things that really played a pivotal role.

I remember at my first job when the CE of a small company said go clean the bathrooms and I read and heard that guy, start from the bottom, start cleaning the bathroom and I remember cleaning the bathrooms that day and saying I got you now because you let me enter the business world. so that's a bullet point that says now I'm in and now I'm going to catch them all and I'm going to catch them all. I didn't mean in a bad way, you know, now I only have one place to go, but I go up to the other thing.

When I look back, it was pretty formative being an only child, a lot of love in my family, it means nothing but a lot of love, and that was a blessing, but a pretty tough high school, uh, three or four, four years, you know. , high school years are 10-day years. It's the first time the girls come to play and so on and um, those weren't easy years and to this day I have to hold back, I have to hold back from letting my ego and my insecurities take over me the way I want. My high school friends who I haven't seen in 40 years realize how wrong they were and I think it's funny that at the age of 57 I still think about my high school friends so those are the little ones things that really push me. wanting to want to achieve and my life was really divided into three different groups in the early years it was about achieving it I can achieve it I can achieve it I can achieve it from the age of 35 to 50 I just wanted to be the best it really drove me from 5055 to this point to 57 and hopefully until the end of my career, what really drives me is working with younger people, it's a bit of a rude line, but I don't want to hang out with people like me I don't want to hang out with older people I want to hang out with people like you uh and so at theoa Capital finding a young and talented investor employee and helping them in the best way possible is really what keeps me going that's great well I want to explain how you recruited Seoa because I know that many of our classmates may be interested in that right now given that it's recruiting season, but I'm

taking

a step back to be okay, so you're a New York Immigrant, you promised to succeed, but I think the path to success is not obvious.

You graduated from grad school on the east coast and decided to return to the west coast and work at Seoa after having sales experience. You know why you made that decision Silicon Valley was a thing then but it's not what it is today Seoa was good but it's not what it is today that prompted you to come back here What did you see? So I think

luck

played a big role. So my first sales job was selling north of 96th Street in New York City. Now it's okay to be north of 96th Street. Let me tell you, in 1979 it wasn't okay to be north of 96th Street.

It wasn't safe to walk north. 96 Street and but that location had one important thing: Columbia University, where someone explained to me what arpanet was and that made me get a job at Sun Microsystems again, that shitty sales territory and you could say I made my own break because I asked some questions, but that unlucky break led to a lucky break Solar Microsystem Strategy number 50 something I don't remember uh and I really thought I was a big shot I was selling 26 27, you know, they promoted a computer full of ships and then i met theode kosla holy cow this guy is as old as me he is a member of the board Scott melio came here holy cow this guy is old with me he is the president the CEO and then I learned the words venture

capital

ist I had no idea what it was but it sounded nice Well with me, then I found out what an entrepreneurial guy was and I decided I wanted to be one of them and I thought I should get a master's degree, learn a little bit more to get a second master's degree and then I wrote 80 letters. to venture companies letting them know that I will be in California trying to sweet talk everyone in attendance.

I had an interview with Don Valentine at 5:00 on a Monday, who took me to his office and asked me what's important, of course he knew that. what is important I spoke for about seven eight minutes I gave it that is, I gave it all 30 seconds of silence and he said what else ah I just give it all and I said don I gave you everything I know I can't give more but the fact that I was so honest and the fact that I told it like it is and the fact that I had sales experience got me hired, but long story short, it was a stroke of luck for Cella Colombia, it was a stroke of luck. break to ask some questions, it was a stroke of luck to learn about micro systems, where I wrote a letter and got an interview about coal and in some cases, I think you make your own break, but don't get much of the reason.

That's why I'm here has to do with luck. I firmly believe that if you hadn't returned to Silicon Valley, do you think you would still be in sales or what was your vision? Six seven years ago I was in New York City and I got a call from someone. There was an HP meeting in New York City at a restaurant on 22nd Street and you and there at Ulip Packard back in '79 was the Italian mafia Jang Kuchi tartaglia. It means that all these guys have the same names as The Godfather in some way, so I decided to attend this meeting and it was one of those movie scenes where every once in a while you see where your life would have been and let me tell you, there would be no been like that.

It's been a bad life. I think they all lived a lifetime. All in one home, their children were happy, but they got up and started singing HP-style songs for Bill and Dave. These are the two founders, Zula Packard, and they gave me a fragment of what life could be. I have been and it totally scared me, uh and uh, so that's what it could have been. I doubt it would have been that, but uh, that was a very eye-opening experience, interesting, well, I want to, I want to move on now to what people I've certainly come here to hear what your SEO leadership is and the success that you and its partners have had not only recently but also in recent decades.

Obviously it's been an incredible year and it's been an incredible decade or a few. decades and I wonder what it is about Seoa that separates it from the others that has allowed it to remain successful for so long, what is in the secret sauce as you have put it and how you have stayed on top for so long, well I guess which is It all started with Don Valentine, the founder of Seoa Capital, who had two lessons that were fundamental in my mind: one was really an appreciation for the markets and the second was the ability to recruit unconventional people, so he recruited Mike Moritz, whose name you probably know. who was a writer, had written a book on Apple, was the San Francisco bureau chief for Time magazine and recruited him to be an investor.

Now you might be wondering how he recruited him to be an investor because he liked him the way Mike thought he liked him. the way Mike asked questions right after recruiting Mike, he, he, hired me and he hired me because of my vision of a business from the customer in versus the product out, and Mike and I couldn't be more different. Mike is a thought. man, a few words, British, I'm Italian, too many words etc but Mike and I learned to work together for over 20 years but it's for dancing and we've kept that that way. continue to hire modest people mostly because modest means people who haven't followed a pre-established set of cues people who have taken

risks

people who have achieved some kind of success early on people who are smart but that goes without saying people who have so much IQ like EQ and then our specialist has a technical background in product management, he has all these conventional lines and he has a line at the end that says he or she doesn't meet specifications but he or she is special and it's the last line that is the line most important of the recruit and So we know a lot of people, we are always looking for people, we are looking for people right now, both in a venture business and in a growing business, we get to know them quite well and then we ask them to listen to the companies with us and we just want to see how they think and we look for highly imperfect human beings, the kind of people who probably contributed individually in their early lives, the quirky kids, if not, the quarterback or the football team or, you know , the female equivalent of that, but people who have a bit of an edge, people who have something to prove, people who need to win, and people who aren't idiots when you peel back a few layers because life is too short and our real secret is

taking

to these heterogeneous individuals. contributors and show them how to work as part of a team to start using the pronoun we, take full responsibility for failure and share successes and if there is a reason we have lasted for 43 years near the top or at the top of our business is because of this leading to a high performance culture that has one goal: a team-oriented ethos to help founders build great companies, so you mentioned Mike Moritz and the two of you have led the company for some time and he had a quote not long ago when he said about SEO that he quotes that we are always outgunned by companies that are much bigger than us and that have threatened us and the founders with extinction.

It's incredibly exciting to prove everyone wrong. You can't get a bigger career than now you talked about your talent Recruiting and recruiting hungry people, but there has to be more to keep you hungry as a company, to keep you from resting on your laurels, to keep you from resting on your laurels How do you plan to continue? Motivate yourself and motivate people, what kinds of things do you implement as a company-wide culture to make sure that happens? There are some things. First of all, I think we are paranoid. We are always one or two new ones.

Invest only to become a second-tier company and that is very clear in our minds. Secondly, we have a different view of risk than most people, people hate doing things because they see them as risky, we actually think that if you are very clear. The do-nothing thinker is risky, so we are always changing and implementing, and the old saying that if it ain't broke, don't fix it doesn't apply to SEO Capital, it's exactly the opposite, if something is working like a dream, tear it down because You know there are some competitors that are looking at you from the outside and are trying to put you out of business, so the last thing we have done in the last four or five months is take down all the signs that we had. all these 200 IPO 20% NASDAQ posters, blah, blah, blah, take them all off the walls, take them all off the walls and let's act like we haven't had a single win, so we're always playing with the formula. trying new things we went to China we went to India because we asked ourselves the question of where the most valuable companies would come from in the next 20 years.

It was no longer clear that they would come from the United States, so we went to India and China. and we did it in a decentralized way, we met with some people over a period of 90 days and we told them that we would like you to be Sister

capital

China, you make all the decisions, not us, no other company has done it, so we always We take

risks

because taking risks is the only way to move forward. I want to get to your success in China a little later, but first I want to ask something that I think a good number of my classmates are interested in, which is how you present the VCS and how you present people like seoa.

The web is full of stories of how difficult it is to introduce yourself and seoa. I was going to share some stories, but there are a lot of words I can't really use. uh, on the stage here, so I'll just say that there are some, there are some aggressive, uh, it'san aggressive pitch meeting usually, so I'm wondering what you look for in pitches, what sets the best ones apart, and what tips you might have. For people who want to come and introduce you, let me set it up at the beginning. We are very aware that when someone comes to Sequoia they are prepared.

We are very aware of the fact that in many cases it is their big day. of many important days, maybe they go to indre and maybe they go to a landmark, so we take very seriously that meetings in Sequa start exactly on time, end on time and no one has their iPhone on, goes on against all our culture, no one sends emails just to be honest, now we don't have flower children at SEO Capital either, we ask questions and I will tell you that there are some associations that are afraid to ask questions to ruin their reputation no, we will ask questions and we will try to treat people like we would treat someone in our living room, but if we have a question about the size of the market, if we have a question about some topics, we will ask it and unfortunately Because we ask three or four questions from time to time , we have a founder who realizes, oh my goodness!

I just started a company pursuing a $42 million global market. That doesn't feel good, but it's not meant to be rude, it should be understood. person's business, so some of the best images are Drew hon, who was going to launch a company in a crowded market and yet could clearly articulate why none of the existing products were going to make it. Very clear thinking is one of the things we look for. It's not a fancy slide speech, but very clear thinking and we pay special attention to the little pronoun words used when someone says "I can send you this." It's a little warning flag.

What do you mean you can send us? You are not sending us. anything, it's his company that sends us, so we pay a lot of attention to everything or Fred Luy, who had a company that was growing like a weed and all he told us was all the mistakes he made, those were the photographs cool, those were people. who were self-aware, there were very clear thinkers who were willing to learn, willing to listen, and in some cases willing not to listen because Founders tend not to be the best listeners and in many cases they are right because they are doing things for you. testing things about your investment philosophy, you referenced this before, that you look for investors who come from modest means and I think you also look for entrepreneurs who come from modest means, you said we want people who come from humble backgrounds. and I have the need to win, so what types of entrepreneurs make the best founders?

You know, in particular, if someone who had an MBA from Stanford Graduate School walked into your office, you know what profile you're looking for. Because I believe that entrepreneurs like investors come in different flavors and I will tell you, as I told my children, that if you are desperate it is a great asset, if you have too many options in life, it clouds your thinking when you only have one. path to follow and that is forward, it is very easy to just go, go, go, failure really is not an option now what we look for in entrepreneurs is people who have not followed the same paths, people who have done extravagant things that have taken risks.

For that, we look for people who have knowledge in the domain, not so much those who plan a business because they want to make some money, in reality we look for people who are very interested in their product or service being used by the next 10 to 20 million people. and we also look for people with a little secret to solve a problem they have and it just so happens that they don't know it, we don't know it, but they are the proxy for the next 20 million users, so Yan WhatsApp understood it. Privacy and low-cost messaging. I had that need.

WhatsApp started. Well, the founders of Stan's Yahoo couldn't find anything on the Internet, so they created a search engine. They created the yellow pages or something as simple as something because we can find. our first beta site, the founder of Next Generation. I'm thinking about looking at SEOa more broadly and, um, one issue that affects SEOA and the valley as a whole is the gender gap, yeah, that there aren't many women working in tech. or engineering and S seoa itself does not have female partners, yes this is something you have talked about before but it would be interesting to hear your opinion on why there are not more women in the valley in general and in Seoa, what is the reason of this, so look clearly, I can make many excuses, not many engineers, etc., but all we need is one or two, so I think it is just an excuse and I will tell you that our inability in the US. , we have women investors in India and China our inability to have women investors in SEO US is an objective failure on our part, let me be very clear, we have a diverse set of talent at Sequoia, we have engineers, sales, marketing, directors financiers, Italians, Chinese.

India, but we don't have the women's point of view and if you just think about consumer investment on the Internet, half of the population are women, so it is in our interest as good citizens and as selfish and as selfish investors to have that point of view. We have been looking and will continue to look for female investors. We actually hired someone from GSB a couple of years ago, he spent the summer with us and then decided to become an operational person. Now yes, but we have some. women Partners Blair, our marketing partner came from Stanford, our global CFO is a woman, but you're absolutely right, we don't have an investment partner and that's a huge failure on our part and, by the way, we look good, so time.

You'll be receiving some resumes this afternoon, so I want to lead us into a broader discussion here about the valley as a whole. Although we could talk about Seoa all day. You know, times in the valley are obviously very good. Seoa had notable success with WhatsApp, but there are a number of big acquisitions going on right now. The $19 billion acquisition of WhatsApp makes it worth more than the following companies: Southwest Airlines, which flew me across the country last month. Ralph luren ConAgra Foods, which employs 26,000 people and even Chipotle, which feeds me three or four times a week.

The list continues at Harley-Davidson. I have a whole list here, you know, you know and I'm not questioning the value to Facebook. What I'm questioning is whether these companies are really worth that much Peter Teal has a quote that says we wanted flying cars and instead we have 140 characters. I wonder how you think about that. Is this an overvalued bubble? Do these companies really create the kind of value that they are being estimated at boy, are there many questions. You ask me if WhatsApp is worth 1.19 billion. You ask me if there is a bubble. So some answers, let's start with WhatsApp.

Let me ask you all if you own 100% of Facebook and you have a market cap of 190 billion and you have a huge unprotected flank called mobile, what is it worth to you to prop up that PL? That flank is worth 10% of your market cap or not, it wasn't just WhatsApp, it was Instagram too that we sold them with those two properties that nobody talks about, that Facebook is already weak on mobile devices, so the value of A property depends on the eyes of the buyer and the seller, I can tell you from the eyes of the buyer.

It was definitely worth 10% of its market cap to scrap that plan, be next in if we're done, if we live in a bubble. I believe that public markets are rational and reflect the transformation caused in the industries of Manufacturing in the US and in the healthcare sector depends on technology, as we are seeing the number of new Fortune 1000, the percentage of new Fortune 1000 every decade it increases and it increases 40 years ago, 30% of the Fortune 1000 changed in the last decade, 70%, so think about that rate. of change and you are seeing it reflected in what some of these technology companies that are being valued are crazy in a private market and the only rule that is the most fundamental rule of investing is that we live in cycles and every time you hear it's different this time it's the first time this is going to happen that's bullshit we live in cycles and the more you hear the words billion dooll market cap the more you know you're approaching the top of a cycle in 1999 there were a lot companies without a zero business model, what we are seeing now is a lot of companies that deserve to have private companies that deserve to have a wonderful market value and a lot of others that if I hide the company name and show you the financials, you won't would attribute the value that private markets attribute to these types of companies, which is a far cry from saying that as long as you have a problem in a public market company, the hedge funds are going to disappear, the last of AG's money is going to disappear, the Billion dollar funding is going to disappear and a lot of companies with horrible business models, maybe revenue, but terrible unit economics, won't be able to raise money and that's what it is and then it's going to get ugly very quickly.

I think that things in a private market for a large number of companies are in la la land because the companies are not worth anything that the private market attributes to them now. Because? All of this is happening because first there are investors and then there are tourists who say, "Oh my God, we're missing out," so more and more money comes in and invests at higher and higher levels of risk, but they don't do it. If I don't realize what's happening, then something like a dislocation happens in the public market, a 500 point correction squeeze happens, all the money tends to disappear and all these companies that are used to burning 50 million cash per share in private markets are going to be harming that. is what I predicted will happen, so we are in a kind of bubble, you, we are approaching the top of the market, yes, in private investment in the market, okay, so, about the financing landscape, you, We, we talked a little bit behind the scenes.

On some of the confusion out there, there seems to be a shift in the funding landscape, people are talking about angels and seed funders, you know, rising in power and disintermediating VCS, what's your take on whether that's a trend, It is a real Trend, what is your opinion about it? Look, it's pretty simple with the advent of the Internet and mobile devices, we saw the birth of what I call application layer investing, where now you can buy a computer for $1,000 or less or store your files on Amazon or use code open and you can create a product for $200,000, so the cost of starting one of these companies is much lower.

Remember that it is a startup cost, not the launch cost, so for the first time we have seen the growth of Angel Investing, which is necessary because there are so many founders and entrepreneurs that we could not make all the investments that we see but at the same time We've also seen these things called party rounds where instead of raising $250,000 out of 500 or a million money you're throwing it at these founders and they're raising these 4 or 5 million rounds before you have a product without calculating what that is. means. Keep in mind that angels spend so much time with a founder in the life of a company, if the life of the company is that long, angels spend so much time and as a founder has to calculate how much capital he wants to sell to an asset class a partner category think about us, partners who will spend maybe the first nine months with you, then the Venture guys will come to spend the next seven years and you have to calculate how much equity you want to sell to a partner in the next seven years and then the public market will do the rest, so angels are necessary in my opinion, especially for these applications.

Level company if you are going to go. in the lab and build IP for 18 months before launching a product, an angel won't do much for you, but in these mobile internet companies, the angel plays a productive role as long as you don't sell a ton of your capital and after the first round he has sold 62% of his company, it's crazy, he should be totally selfish with the first actions, including actions with a venture company, the guys raise the least amount of money possible to reach the next milestone when the value goes up and then when you have market power and you have three four five 101 15 billion worth Uber 18 billion or in our case Airbnb 10 12 billion, then you raise a lot of money, but you have to protect those Actions. with your life and you should design your investors the same way you design your product and your engineering team, how should founders think about raising money?

So you should know if you want to protect your capital but want to raise money as quickly as possible? go up as little as you can to get to something you can show plus maybe a quarter or two to have a little bit of protection and then raise some more money, go up as little as you can, not as much as you can, because that's the most. expensive capital that you are going to sell increasesleast possible and, conversely, be very generous with the first engineers you hire, those are the ones you should invest in because the first two or three engineers, if you make a mistake, you are done, so we should all become engineers is what that you say no, no, because if you are building a technical product, an A+ engineer will help you recruit an engineer, if your first two or three engineers are B engineers, you are already done because you will never do it. surround yourself with W with the A10, you know, with the A8, plus talented people, they got it right, it will be at Stanford, then we have some good engineers here, we only have time for one more question before we go to the audience and I just wanted to To address SEO success in emerging markets, you know it has been successful in Israel, India, and particularly China, where others have not.

I wonder: do you know if this is just another kind of secret sauce? Hire the best people and they do it well. things or what has led us to success there, uh, a little bit of luck, we found good people, um, but we looked for a while and I think courage and foolishness because I think, in retrospect, we can't believe we did this . hiring people and working through the tax side of the house, which is how we make money, investing, it bothers me to have that decentralized so that not all decisions go through California because what do I know about what happens in China, what do I know about what's happening? in India I travel to India and China four or five times a year but at the end of the day I don't really know what's going on there, so we decentralize the attacks out of the house and we centralize the defense, the enforcement of staying out of jail, uh, the financial reporting, no one has had the courage to do what we did to completely decentralize and have relationships and trust as the things that really keep us as one company, it's not a franchise opportunity.

We are an association, it's not China's capital, it's China's capital to show you how carefully we use our words and essentially we are held up by a lot of Chain compensation is a small part, a big part of this is culture. When we send an email to a partner in China, we receive a response in the same way as when I emailed my partner here in the US and we see our partners. in China, India and Israel in the same way as partners in the US, so having that patience, that courage, that foolishness of organizing that by investing all the time, I think has been the secret of our success, interesting Well, I want to save some time for questions.

Here, we have Mike in the front rows, so start raising your hands. If you are at the top, you can modify the questions and we will have someone read some of them and we have time for about 10 10 15 minutes. of questions, so I have one right in front, we'll go this way and please stand up and introduce yourself. Hello, my name is yes, keep it close. My name is Feder Anoni, part of the faculty here at Stanford GSB. I have a question about Brazil, from the outside it seems that you were not as successful in Brazil as you were in China and India.

I don't know if you could talk about the reasons for that and what learning you got from that experience. So we hired an excellent GSB graduate about three years ago. We hired him. In October, it's the first year of working with us, during the first year, during the summer, until the second year, and we had the idea that we were going to go to Brazil and we traveled to Brazil probably six seven times we made two investments uh and uh the more we traveled there, the more it became evident that there were very few engineers leaving Brazil and we did uh and understood that we would have to go to other lines. of businesses like the consumer industry, supermarkets, restaurants and we want squ Capital to be really a first association, what we didn't want to do is go to Brazil and support a lot of similar companies, so we hired a gentleman, he opened a office in which We made two investments and then retired.

Now there's a second part to that story, so we did the right thing. We pride ourselves on doing the right thing. A young man we referred invested it in a fund that includes WhatsApp funds, which he is very happy about. and he wanted to start a company and we gave him a million disposable doll seeds, not disposable because that's a derogatory term, but you know, a startup with little chance in Brazil and he wanted to start an online credit card company, so We help him in board of directors meetings. on the phone for the first year and with a million dollars he launched a credit card company in Brazil.

Brazil there are a lot of users who want to get a credit card, they change the law in Brazil, so now if we want to launch a competitor, it takes three years and we just invested $1 million in a series. After this disposable million dollars, we now have three investments in Brazil, but we have no intention of planning a flag in Brazil, mainly due to the number of computers. Scientific engineers, the last thing I'll tell you is that I met with a gentleman from Gartner who lives in Brazil. He does software monitoring throughout the United States. He's the one who writes all the graphics in the software and I asked him what the two were. or three leading software companies in Brazil, he could only name one or two, it was very clear that it was too early to go to Brazil from a market of IT companies that did not look like the Internet, so we backed off and that's the real story , I think so.

I have one more question here Hello, my name is na Nama. I'm an MBA from the class of 2016 and I think now my classmates already know what I'm going to ask. We already touched a little on gender. inequality in your company I wonder how it affects the way the company approaches women entrepreneurship. Are you missing out on female business owners because you don't have a female partner? Well, you know, we have no way of knowing if we're short. Over the past 10 years I have served on half a dozen boards where the lead CE founder is or was a woman.

So we're not afraid to support women right now. At one of my best companies, the founding president is a woman. uh house, another company that I'm not on board, the co is a woman, so we have no problem supporting women. I think we're missing out as investors primarily because, as I said before, we're missing a point of view that represents the middle. of the population and if you do any studies on high performance teams, high performance teams have heterogeneous views and we are missing half the US population, but we have been in business with numerous women and we hope to be in business with even more women, so if you want to start a company, come to Sequoia, we'd love to hear your pitch, there you have it, we're going to take one from Twitter, but keep your hands up so they can get you the microphones. but now we will go to a Twitter question.

I'm not sure it went great, thanks. The Twitter question I want to ask is that you contribute a lot of your success to luck. Do you have any habits or ways to increase your luck? chances of being lucky, yes, I think so, and my partners sometimes get upset with me. I lean forward, not to write checks, but to listen, so I remember being on a panel with another risk person who said, "I'm not going to tell you her name." I said, well, we like our business plan to come from screen sources, lawyers, etc., and then it was the turn to answer the question, this is a little before email.

I said 8543 927, meaning our phone number, uh, and that's what I like to do. I would like to go look in all the nooks and crannies where it's not fashionable to go look or when I hear something, something is really horrible, this is a really bad time, my brain is working, it's a bad time, fantastic, I want to go. Look, and then it's from my sales days. I guess now if you're in sales, they hand you leads. When I was in sales, no one ever handed me a lead. It was a lot of cold calling and in a company, especially in the company where the lady is the president, I am tremendously proud to have called myself, uh, it's luck, no, I think hurry up, luck and look clearly, look, there is many people as talented as me who could be sitting here.

I don't have any special talents that I want. Just to be clear, there are a lot of people sitting here and yet I'm the one sitting here, so luck has something to do with it, but I'll tell you that hustle and bustle also has a lot to do with it, uh, believe. we have a question on this side thank you can you just talk about it they say yes hello dog my name is Yi I'm from quom and you say like Cycles like uh like you mentioned mobile apps we're getting close to the top and can you please share with us in your mind what are the next things the cycle is about to start or maybe the next things you can see thank you so it seems like people always ask me what's hot and here Here is my answer, if I could tell you by definition what it is.

It wasn't trendy the day before before I came across Google. I wouldn't have told you that a new entrant to the search market was 20 search companies that were all the rage or the day before YouTube when Internet videos were constantly crashing. I would never have told you that was fashionable. We have market maps, but market maps, by definition, look at the status quo and stretch the line and every once in a while we find the company that fills a gap, but the best investments we make are the things we haven't even thought about. thought Imagine Airbnb, imagine asking me that question the day before Airbnb and I'll tell you, you know, I'll tell you what's trendy, one guy is GNA, there were three guys, in that case, three guys will show up and they're going to tell me that What's trendy is a situation where I'm going to rent rooms in my house to strangers, we're going to create a two-sided global market and I would have said, come on, that's crazy, so that's it. a question that by definition you cannot answer now I will tell you that in the latest Square Capital fund is a three-year fund we have fewer mobile internet consumer companies than we had in the previous fun, I cannot tell you if it is because we lack something or we are reaching a saturation point.

I can tell you that we have more healthcare companies. We have three cancer treatment companies. We didn't have three of them in one fund before. I'm going to tell you that cancer. curing is in fashion, no, I'm not going to tell you that, um, but it's an impossible question to ask and the only way to learn is to have great dumber years, listen to everything and not throw out crazy ideas now from time to time. We'll admit that we make one of these investments like Airbnb and 90 days later we tell ourselves what the heck we would be thinking, but you know it takes flexibility in the brain to say, Would you do Airbnb now?

The last thing is: Would you share? your car, would you let someone else drive your car from point so you can drive from point A to point B and they can drive from point B to point a or leave your car at the airport when someone lands they can take your car and use it? As a renter, you know, I can tell you that I find the use of my car quite personal, but I have an open mind because I want to know what you do, man and woman, what your point of view would be. I think we have one. on this side get up and there you have it hello I'm Javier Solano I come from Chile and you mentioned that your first years in the United States in high school with some kind of needs made you who you are and you are looking for people like you and I agree that it is easy determine when you are needy, but how do you stay hungry when you achieve a certain degree of success?

It's not something I consciously do, so it's funny to admit it once every 10 years. that we admire Briggs at seoa Capital, you know, because things are going well, so obviously let's take a look, and last time, the most negative thing I got was the fact that I mention that once a week I have a nightmare in the one I am I'm going to be fired by SEO Capital and people told me boy, if you feel like this, imagine how we feel now, no one threatens me. SEO Capital is a place where you know we want people to be successful.

It's actually a really fun place inside. but for me it's just pure, unadulterated fear. I remember walking into a Stanford shopping mall in 1988 making $67,000 and I didn't really have enough money to buy gifts. I remember those days and I didn't feel very well, so I have this. I still have this fear. I'm going to be poor. I'm still afraid of being kicked out of Sequoia Capital. I still have the fear of really ruining a Founder. I have a big fear, you know? I have been on 30 boards of directors and I have to admit that I ruined one company very well now, fortunately, I have helped many others, but I am afraid I have a great sense of responsibility.

I think fear would be my number one thing and it's not something I do, it's not a little game I play with myself, in fact it really gets me going and motivates me. I think it's actually a character flaw, but you know, that's what it is, so I think I'm going to do it. Take the last question here and it's been very personal today and we appreciate it, but I still want to ask you the question that all students ofGSP must answer when they apply here, which is something we have to include in our application and What matters most to you and why, and I want to ask you that question.

Well, I clearly got the answer wrong, as I was rejected twice from Stanford Business, so it seems to have worked out for you. Let me start with that, so look. you're all young uh you want to achieve uh and you're in that first third part you know I describe my life in these these three thirds you're in the first third part but if I could give you some advice and I'm going to I'm going to take poetic license I'm not going to say one thing I'll say two or three things This is my view of things now that I'm a little older The number one dog chooses to have children or not, but If you choose that your children invest in your children, that to me is the most important thing, second, do it, be successful, but bring others with you.

If I look at my career success, it was when I was in sales, if I shipped a computer into someone else's territory, I would send the email saying I think you should get half instead of managers having to get involved. I remember it started then, if we do something right, it's AO, it's a win-win, take as many people as possible along for the ride. you meet an idiot let them rot in their misery just stay away from them uh and number three bring it every day get up you know, I'm telling you, there are some days when I go home and I'm defeated, oh my god, how much more can I do this a good night's sleep I get up in the morning and you bring it back without fear just go, go, go, that wouldn't be the most important thing but that's how I see life and you've heard it before, think about life . when you have half an hour left to live you're not going to think about that, oh boy it could be worth the X of it, it really should have been 1.2x.

I doubt you're going to think about that, oh boy, I just became a coo or VP, man, I wish I became an EVP, you know, you gotta think about that now, clearly you have to achieve success because that's why you're here, because you're motivated and I don't want to sell that one bit, but I think in that order. Take care of your kids, take care of your family, bring as many people as you can, travel with you and stay away from the idiots and get up in the morning with a good night's sleep and just bring it, that would be the important thing, that's great advice, please , join me in thanking you dog, that was great, thank you, okay, thank you, thank you, I appreciate it, thank you.