This 2009 interview w/ Don Valentine (founder of Sequoia) is insane - lots of gems but also tons of hot takes digitalassets.lib.berkeley.edu/roho/ucb/text/…
0/ Disclaimer before you read the actual piece - the interview seems to get testy at some points and not all the language is PC by any means. Here's some notes on the points I pulled out which I found fascinating
1/ On faith: "It probably did a great deal to encourage both my inquisitiveness and inclination not to believe what I was told or heard. In the business I’m in, it’s all about figuring out which questions are the right questions to ask."
2/ On California: "The near East, Boston and places like that, had not a lot happening in electronics. But it was the only place in the U.S...where something was happening, because of M.I.T. and Harvard...But they were flawed; they had snow, and I’m not interested in that."
3/ On HBS and the idea that he couldn't manage money: "My rejoinder was I was not interested in learning how to raise money; I was interested in building great companies, and I didn’t have to go Harvard Business School to build great companies."
4/ On marketing: "The marketing department...decides, based on what their capabilities are, what problems they can solve, and what sequence should they solve them in, and how much money can they spend on developing that product, and how big is the market?"
5/ On an education: "Fairchild was my major education…You can skip all three schools and the beatings with the nuns and the fascination with the Jesuits."
6/ On metrics that matter: "There are two things in business that matter, and you can learn this in two minutes—you don’t have to go to business school for two years: high gross margins and cash flow. All the other financial metrics you can forget."
7/ On invention: "They change the fundamental relation between one kind of material and another. They change from having a computer that would fill this room to where this giant computer becomes a laptop—that’s invention."
8/ On the government: "I’m not interested in being in business where there’s a unilateral behavior potential. I want to be in business where the decisions are made by rational people at Yale University."
9/ On historians: "Historians sometimes magnify the impact of irrelevant events beyond their utility."
10/ On investment management: "I didn’t have the resources to play Texas Hold ‘Em and put more chips up. The opportunity to have a large discretionary pool of money to continue to support the investment ideas was the difference in the environment I was in."
11/ On investment criteria: "Must be a very big market; must be in Northern California; must be in advanced technology; must have high gross margin ability; must have the potential for Sequoia to make $100 m[illion]; must be positively responsive to our active participation."
12/ On the nature of the Valley: "One of the arguments that I think is very compelling is, once you get a success momentum moving, the young people will leave Fairchild or Intel and go to the next startup because of wealth creation."
13/ On rules: "Atari—you go on the factory tour and the marijuana in the air would knock you to your knees—where they were manufacturing the product….There are no rules that say that certain behavior produces a result that’s directly related to the behavior."
14/ On teams: "At Sequoia, we all get credit and recognition for investing in Apple, Cisco, Google...We are team investment partners at Sequoia. We pride ourselves on our differences and the methodology by which we develop our individual opinions."
15/ On consistency: "This stability is part of why we have had the same limited partners for almost 40 years. Stability and returns is how Sequoia is positioned."
16/ On storytelling: "What happens in a conference room like this, we have people come and pitch us for financing. And it’s storytelling—can you tell a story? Huge numbers of them have no idea how to explain their business."
17/ On immigrants: "One of the great advantages Silicon Valley has always had is we have been very fortunate to have a huge population of immigrants."
18/ On Stanford: "One of the very incredibly clever things that Stanford University allowed, or maybe even beyond allowing, encouraged—they encouraged their faculty to get involved with the local technology companies: be advisors, be consultants, be on the board, participate."
19/ On VCs: "Yes, not all venture capitalists are smart; a lot of them are pretty dumb."
20/ On 1st Sequoia fund: "Five million dollars. And we were going to invest in technology companies, only on the West Coast, that were addressing big markets. We were interested in building major companies; we were not interested in being in the investment business."
21/ On the nature of the venture business: "See, venture capital is very reducible to a few words. You have to be interested in managing change, and you have to recognize that change is necessary."
22/ On HR (hot take alert): "They’re not interested in change—they’re interested in sameness...They want obedient people. And with obedience you get no innovation, because it’s disobedience that gets you the innovation—someone who doesn’t believe what’s going on is the limit."
23/ On listening: "I always speak last."
