My firstminute | Peter Fenton, Benchmark Capital

What has Peter Fenton learned from his experience as one of Benchmark’s General Partners? 

• Nurture relational curiosity 
• VC is a youthful business 
• Business logic doesn’t age well but human nature does 

There are just a few of the things he discusses with us in this episode of my firstminute from June 2020. 

Peter became a General Partner at Benchmark a little more than a decade ago after graduating from Stanford, part of the famous class of 1994 (which included the likes of Brian Acton, the founder of WhatsApp, and David Sacks, the C.E.O. of Zenefits). Peter was an early investor in Twitter, back when it had 25 employees and sat on the board until 2017.

Peter's current investments include EngineYard, Lithium, New Relic, Pentaho, Polyvore, Terracotta, Yelp and Zendesk. He also sits on a number of boards including Yelp, Docker, Zuora and many more.

Transcript

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First minute capital is a $100 million seed fund, proudly backed

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by a number of tech founder LPs, including 30 unicorn founders.

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Part of our DNA is to take wisdom and lessons learned from one generation

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of successful entrepreneurs and share those lessons and pieces of advice

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with the next generation of successful founders.

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And that's really what this webinar series is all about.

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My first minute is a fun opportunity to informally speak to

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some of the world's top founders on the first minutes of their careers

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and how they see the world and general leadership advice.

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My name is Elliot O'Connor on the founder

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and CEO of Frontier and a former first minute capital investor.

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And today I'm speaking to Peter Fenton, general partner at Benchmark.

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Peter, it is a real honor.

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It's a real pleasure.

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You and I had some great conversations

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over the last couple of years, and I always come away from them feeling

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a lot smarter and struck by just how thoughtful you you are.

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About just about

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every question that a venture capitalists probably ask themselves over a career.

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And I'm really excited to be able to share this with the wider audience.

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And we've done an incredibly high wattage group today,

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mostly peers across venture and the ecosystem.

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So I'll kind of try my hand at ask you a few questions,

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but that will also kind of turn

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the conversation over to to a wider kind of Q&A format pretty, pretty quickly,

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because I I'm sure people have plenty of great, interesting questions to ask you

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and for the kind of the short story on you.

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And I think it could take up quite, quite a long time of the of the talk

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so I'll do a brisk one is obviously your general partner

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at Benchmark and you've been there since 2007 I believe, and you've invested

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in in so many amazing companies and you're a leader of the venture industry.

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You've backed the likes of Twitter, Docker, Suarez, Zendesk,

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the list goes on and you know that that track record has obviously earned

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a spot on the Midas list since 27 every single year.

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So so, you know, you're you're at the top of your game

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and have been for a very long time.

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And that's that's quite something in the business that you're in.

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Previously, you were obviously direct sell another well-known fund

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and you spent much of your life really at the center of the tech ecosystem

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and in Silicon Valley having even grown up there.

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So, you know, really a pleasure to have you here today.

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And we're going to jump around

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and ask a few different kind of questions and touch on a few different topics.

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I thought I might start off with something I'm really interested in your honesty

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right now.

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Kind of you're a leader of the industry or you're at the top of your game,

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as I said.

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And it's hard to believe that Peter Fenton could be bad at anything.

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But I'm just curious, when you started off in Benchmark

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sorry at Excel 2026 or so,

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what what came naturally to you when you joined

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the venture industry and what time kind of came less naturally to you?

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What did you really have to work on?

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I appreciate that question.

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I want to devote a little time

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not to be sanctimonious for the righteous,

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but just to talk a little bit about the state of our country right now.

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And we'll get back to that not as a political thing,

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but more from the what is the venture industry's role

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and what it feels like.

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You know, just in all of a sudden shock of awareness

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around the state of the decrepit state of our civil society.

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And I guess I'll get to that probably through the course of this conversation.

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It's top of mind for me, so I just have to flag it

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before we dove into anything of more frivolous nature, specifically me,

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but you know,

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when you start, it's funny because you, you have

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and I haven't thought about this until you ask this question.

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In a sense, you fall back on what you know, you fall back on what you

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what has gotten you, where you are, wherever that might be.

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And I do believe we all have dimensions of our personality and character

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that are angular, that

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that are differentiated just in the way we were born to different people.

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And, you know,

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I had the secondary thing, which was like, I needed to be somebody that I wasn't.

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And so when I started in the venture business

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and there's two competing forces, there was the be a better version of yourself,

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which to me was I get to what I what I think that was.

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But then also like, oh, you know, I got to fake it until I make it.

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And that second instinct I really regret having had

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and I think it led me to be far inferior for the first decade of my venture career.

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And it really didn't, you know, I did.

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I didn't exercise that inner, you know, kind of false ness,

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if you want to call it anything, until I moved to benchmark.

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But the first thing which is like what was my

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there's a cliche term called your superpower but

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I absolutely love to learn and it is a voracious

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like can't get enough of it and if I'm not learning something new,

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there's, you know, my world is collapsing around me.

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And when I am, it's just like people think I'm crazy

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because they'll have stacks of books around me.

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And as a freshman at Stanford, David may or may not remember this.

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Like I spent a lot of time in my room as a philosophy major.

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So, you know, the which which allowed me to be especially annoying

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with my political views, as you could imagine.

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And, you know, I just was like sitting there thinking,

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how could it be that there's something as amazing as university

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where there's an infinite number of topics to go learn and why wouldn't everyone

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want to be a professor?

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Like if you could be around this all your life, this is crazy.

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Like this is the best thing ever.

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Anyway, at some point you, you know, your, your, your preferences shift.

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But so I fell back on that specific

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question of like, you know, learning, learning, learning.

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And I came into the venture business.

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I think this is true for any great CEO or any great venture capitalist.

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They want to be that where you every day you ask the question of like,

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what can I take out of this?

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What nugget, what, what, what

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what opportunity is this going to give me to expand my horizon?

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And I would go to board meetings.

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I remember being really incompetent.

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I mean, I was 26 since 1998, 1999, when I joined Excel.

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I was incompetent and there was no basis for any anybody to listen to me.

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And I didn't like to talk, which was a problem.

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And it may be your problem to that.

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And, you know, I said, well, I got I've got to be like the smartest guy

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in the room kind of thing.

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And then I quickly learned that I better keep my mouth shut.

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There's the old Thomas Jefferson statements like, you know,

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I won't quote it exactly right.

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It's better to be quiet and have them

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think you're an idiot than to speak and remove all doubt.

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And I think I figured that out after the first six months

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that I better shut the fuck up about stuff I didn't know about.

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And then I started to study.

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You know, I started really study the people in the business

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that had been differential, early, successful.

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And I find that every one of them

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was an invitation for me to look at the systems that they have.

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And I mean really in the last years to become addicted to systems thinking

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because we're ultimately just an amalgamation of our systems

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and our habits and systems of habits for me are a little bit interchangeable.

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And like, what was it about Dave Strom, who had been the founder

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of Greylock that made him so reliably successful?

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And you know, how did he work with entrepreneurs?

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And when you when you really study somebody, you can't help

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but also notice their great weaknesses and everyone's incomplete.

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But then I had studied people like John Dore,

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and I

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thought, well, John's got something else going on, which is sort of the, you know,

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evangelical minister who is pushing like, you know, quack medicine.

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And because kind of don't believe what he's saying because it's such hyperbole.

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And like I can that's that's like

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my partner Bill pulled me aside right as I joined Benchmark

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and he says, can I can I can I ask you a question?

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I've been dying to ask you this question.

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Do you think John Doar believes what he says?

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Because if he does, then I can see it.

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But if he doesn't, he's probably the world's best liar.

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And if John was on this call, I would still say that

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because he's you know, he's so authentically that way.

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And anyway, so.

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So you studied people and I study.

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That's what that was my my my trick, I guess, for the first decade, which is

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I was obsessive about learning and mapped out to as many places

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in the venture business as would give me a feedback loop because as you know,

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the whole team of people are venture capitalist.

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The feedback loop in venture is

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just painfully long

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and unreliable insofar as like you don't get a quick answer

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as to whether you're right, definitely get an answer relatively quickly, too long.

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The cliché that lemons ripen early

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and you just don't know.

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Like, does it make sense to go to that conference?

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Does it make sense?

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It is called.

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But, you know, I really did put that and I think everybody in their

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life is well-served to do an inventory of their habits and routines.

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And I and I index that towards growth.

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The second part, which is the part that I think is more of my embarrassment,

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my humility is, you know, the fake it to you make it adage

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that certain like I don't know I don't even know like pre money was.

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So this is this is by the way this like the other conversation

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about like the appalling state of our civil society

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that I could have been successful venture and it yes it's luck

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but it's an amalgamation of a set of advantages

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that I certainly didn't deserve differentially and I got them

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but I didn't know what pre money was people putting your pre money was

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I didn't know what a capital really needed to do.

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I never should I didn't know.

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And I realized like it's one of things that I ask.

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It's like a surge in asking, like the

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the person working

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next to them, you know, what's a scalpel?

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And you're like, what do you realize?

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My total ignorance, right? So I did fake it to make it.

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It held me back because there's a few things

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we do in our life where a book that I insist every CEO I work with reads

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is the five temptations of the CEO

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and one of the traps that I fell into.

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And it was the the first trap, which is, you know,

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you know, status over purpose.

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And the five I don't I can I haven't written down.

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I'm not for this call, but I am I can I will do it now.

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But it so. So what does that mean specifically?

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I love being a venture capitalist.

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Like, I fucking loved it.

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Like I was like, I pinch myself and wake up every day,

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say I can't believe I have the dream job at age 26.

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Oh, my God.

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And then I became attached to being that.

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And that's that didn't serve me because, you know,

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I think one of the first really

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competitive situations I got involved with was Jay Boss.

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This is in 2003.

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We were I was competing against Excel and all these other firms and,

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you know, I had built some relationships and friendships and I had advocates who

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who probably could see through my, my, my issues at the time.

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And I'm trying to get Mark

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Larry, who's a guy I mean, a difficult entrepreneur, to say the least.

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And we were doing a reference check on him and he had

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the this is just a vignettes like most of the things we do.

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And it started to be rambling. That's so obvious.

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So back in March, Larry, he was this renegade punk who had an open source

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software company that was trading at like $2 a share and it collapsed to like

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a couple hundred million dollars market cap down from 20 billion.

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But then we were competing for it.

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I'm trying to convince Mark to work with me.

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And a big part of this job is, is it does involve some measure of sales.

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And I wrote him like 15 pages basically like all the things

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I'm going to do to help you.

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And, you know, a friend of mine pulled me aside and said,

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doesn't that like, you know, that's not you.

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So what he needs to hear from you is, is your heart

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and tell him that this is a career bet, that he's a pain in the ass and that,

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you know, people probably try and fire him.

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He had told the thing I was trying to allude to before and referencing,

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yet, among other things, told a customer in a public forum to suck his dick.

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So, you know, you think about

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it's not so obvious.

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And he turned out to be, you know, perfectly flawed like the rest of us,

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but in some especially and challenging ways.

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But I did that.

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I mean, I said to them, look, this is I'm giving you this is a career bet for me.

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I was just myself, man.

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And when I showed up that way and said, I can't give you more of this

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or more of that, but there's an adage it's I tell most people in any company,

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any human being, is that

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whatever you think's your liabilities probably an asset,

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because if you can be vulnerable about it in transparent

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and not chase it out of your your conscience,

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then people will empathize with you and they'll they'll there is this measure,

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I think, of, of unconditional love we have for each other, simply

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because that may sound on a Big Sur,

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but there's not unconditional love for fakeness.

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So, you know, and if it's identity or ego and I was attached to the idea

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of being a venture capitalist and it took me, took me a long time

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to shed that, which I thankfully did years maybe I haven't fully, I don't know.

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So anyway, that's your first question.

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So please, I don't want to cut you off from asking more now.

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No, not at all. That was that was wonderful.

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And I mean, you've you've you've you spoken before about it,

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your hyper curiosity, hyper competitiveness, these two traits.

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And you've also, you know, with with me as well.

00:13:02:15 - 00:13:06:18
And when I came to see a few times the offices, we've spoken

00:13:06:18 - 00:13:10:28
also about the importance of relationships and and obviously I'm

00:13:11:02 - 00:13:14:25
you know, you've you've had the fortune to work with some of the other

00:13:14:25 - 00:13:17:18
great venture capitalist, particularly as as one of them.

00:13:18:18 - 00:13:19:18
I'm curious,

00:13:19:18 - 00:13:23:06
you know, you've mentioned before how you've curated certain

00:13:23:15 - 00:13:26:16
podcasts and certain topics and certain ways to learn.

00:13:26:28 - 00:13:30:10
You must also spent a lot of time curating the people around you

00:13:31:05 - 00:13:33:12
that you spend time, quality time with learning.

00:13:33:12 - 00:13:36:17
I mean, I'm curious, what are the kind of few relationships

00:13:36:17 - 00:13:40:20
that have really contributed to your professional personal life,

00:13:40:20 - 00:13:43:21
be it felt early or anyone else, anything that comes to mind?

00:13:43:22 - 00:13:46:02
I'm very curious, what are the people that are different?

00:13:47:10 - 00:13:48:11
I appreciate the question.

00:13:48:11 - 00:13:51:04
It's certainly the thing that I've talked to people

00:13:51:04 - 00:13:55:16
at the end of their venture career when they measure the quality

00:13:55:16 - 00:13:59:14
and value performance of the last quartile of my career.

00:13:59:14 - 00:14:01:28
Since I'm talking to people leaving the business and

00:14:01:28 - 00:14:04:11
universally people come back because it wasn't the money,

00:14:04:11 - 00:14:08:14
wasn't the fame or whatever, it was the depth of the relationships

00:14:08:14 - 00:14:13:18
that really ultimately brought meaning and that sustains beyond the

00:14:14:29 - 00:14:15:17
whatever the

00:14:15:17 - 00:14:17:21
measures of success that we point to hourly

00:14:18:22 - 00:14:22:02
and I had this conversation with Tim Ferriss yesterday,

00:14:22:02 - 00:14:26:05
and he made an observation which is which is very elitist,

00:14:26:24 - 00:14:29:19
regrettably, but but accurate, which is that the people

00:14:29:19 - 00:14:34:01
at the top of their field, whatever field that may be, tend to have more in common

00:14:34:23 - 00:14:37:19
than the people who are in the middle or the bottom of their field.

00:14:38:10 - 00:14:39:07
If it's the same field.

00:14:39:07 - 00:14:42:23
So if I look at people who are entrepreneurs or musicians or authors or

00:14:44:03 - 00:14:46:06
one of the things that we

00:14:46:11 - 00:14:48:13
systematized, the habit we formed, which I urge

00:14:48:13 - 00:14:51:16
everyone to do, and maybe this is a version of that,

00:14:51:16 - 00:14:54:01
is not to have one person, although I will get by

00:14:54:02 - 00:14:55:10
to get to the answer to my question.

00:14:55:10 - 00:14:58:06
Relationships have been but but to build the habit

00:14:58:14 - 00:15:01:15
of nurturing relational curiosity.

00:15:01:24 - 00:15:05:07
And for me, relational curiosity can't occur in a

00:15:07:03 - 00:15:08:17
transactional setting

00:15:08:17 - 00:15:12:04
and so where does that most occurs over the course of a long conversation?

00:15:12:04 - 00:15:15:05
If I took anything from my time in Paris,

00:15:15:05 - 00:15:16:22
this is the first person I would put on my list

00:15:16:22 - 00:15:18:21
of the most transformational relationship in my life.

00:15:18:21 - 00:15:22:00
It ends up a was

00:15:23:07 - 00:15:25:24
I can't describe it it's

00:15:25:24 - 00:15:28:07
he lives relationally.

00:15:28:07 - 00:15:31:06
If you sit down with this person you know he's an extraordinary entrepreneur.

00:15:31:06 - 00:15:34:18
He's been hyper successful in Paris with three an Iliad and

00:15:35:04 - 00:15:37:11
but he's just the biggest heart you've ever met.

00:15:37:11 - 00:15:40:23
And, you know, first time I met him, I was like a typical Silicon

00:15:40:23 - 00:15:42:02
Valley introduction. Meet somebody.

00:15:42:02 - 00:15:44:28
You get a coffee with SIMON. There's the artifice, right? Your role. My role.

00:15:44:28 - 00:15:46:01
And let's get the hell out of here.

00:15:46:01 - 00:15:48:15
You've got other stuff to do. You stay on the

00:15:49:29 - 00:15:50:11
next thing.

00:15:50:11 - 00:15:53:23
Oh, it's 1 a.m., and this guy's running a large enterprise.

00:15:53:23 - 00:15:56:23
And his partner, who's even more extraordinary in many ways,

00:15:56:23 - 00:15:59:11
still being like, you guys have work to do.

00:15:59:12 - 00:16:01:09
Like, why are you staying with me at 1 a.m.?

00:16:01:09 - 00:16:03:16
And it's like, you know what?

00:16:03:16 - 00:16:04:23
More than this.

00:16:04:23 - 00:16:09:16
And in nurturing that curiosity, we were able to in a in a wandering,

00:16:09:16 - 00:16:15:17
long conversation, go to so many places and it's hard to fully convey.

00:16:15:17 - 00:16:16:28
And so so what we do at Benchmark

00:16:16:28 - 00:16:20:11
is every Monday we do a dinner and we invited guests in from the outside.

00:16:20:22 - 00:16:23:01
And I urge you to have a habit like this in your life.

00:16:23:01 - 00:16:25:26
And this is a version of that with this this the Zoom call, but it's not quite

00:16:25:26 - 00:16:26:06
the same.

00:16:26:06 - 00:16:29:18
It's having that intimate 4 to 6 people sitting around the table.

00:16:29:26 - 00:16:32:29
Benjamin Franklin had that as a as a as a habit that we stole from

00:16:33:14 - 00:16:37:20
Bill gets credit for a dinner every night, not just Monday night, but every night.

00:16:37:20 - 00:16:38:15
It was a different topic.

00:16:38:15 - 00:16:40:26
He did the physics dinner, the economists dinner, and then

00:16:42:14 - 00:16:43:26
but we do just the dinner

00:16:43:26 - 00:16:46:26
with roving curiosity, with people who are kind of at the top of their field.

00:16:46:28 - 00:16:49:07
Or that may be and I can't

00:16:50:28 - 00:16:54:05
you know, the joy I'm scribbling notes during all these dinners.

00:16:54:05 - 00:16:55:23
It could be with Jeff Bezos and the way he does

00:16:55:23 - 00:16:58:10
interviews or, you know, what have we learned from

00:16:59:17 - 00:17:03:02
Robert Sapolsky, who is my idol of all time, which is my second major person?

00:17:03:02 - 00:17:04:19
I would say it's that

00:17:05:14 - 00:17:09:02
the Sapolsky is a professor of neuroscience at Stanford,

00:17:09:15 - 00:17:12:04
and I don't even know where to start with Sapolsky.

00:17:13:15 - 00:17:16:16
There are people you meet in your life that have a level of luminosity

00:17:16:16 - 00:17:17:25
that are just different.

00:17:17:25 - 00:17:21:07
And I have found consistently that that people

00:17:21:07 - 00:17:24:07
who live in liminal states, which is to say

00:17:25:11 - 00:17:26:15
that seeing

00:17:26:15 - 00:17:30:18
birth or death or, you know, Sapolsky

00:17:30:18 - 00:17:34:11
spent 30 summers in the savannas of Africa studying baboons.

00:17:34:11 - 00:17:35:28
I think Jane Goodall is a great example

00:17:35:28 - 00:17:39:10
that she's lived in a liminal state of being at the edge of many differences.

00:17:39:10 - 00:17:44:24
You know, the people who live there and adapt and really get comfortable with that

00:17:46:11 - 00:17:49:01
have a measure of density of social or being

00:17:49:14 - 00:17:52:06
that is important for you to have as part of your life.

00:17:52:06 - 00:17:54:24
I think just to know that that's there and it's spiritual.

00:17:54:24 - 00:17:57:10
It's like because it's, there's not it's not ego, it's not

00:17:58:28 - 00:18:01:11
and I see Sapolsky, you know, three or four times a year.

00:18:01:23 - 00:18:06:01
We're working on a project right now that does have some relevance

00:18:06:01 - 00:18:09:17
to the current issues, the United States, which is that if you do implicit bias

00:18:09:17 - 00:18:14:08
training on anybody that the after effects aren't, don't they don't endure.

00:18:14:19 - 00:18:17:17
You can't rationalize social justice.

00:18:17:17 - 00:18:18:22
You can't rationalize

00:18:20:07 - 00:18:21:04
equality.

00:18:21:04 - 00:18:22:13
You have to feel it.

00:18:22:13 - 00:18:24:08
You know, it's an emotional state.

00:18:24:08 - 00:18:29:20
And, you know, we are as animals given to othering.

00:18:29:28 - 00:18:34:12
It's part of our DNA is part of our past, our our blood history.

00:18:34:23 - 00:18:36:07
And we can other anything really.

00:18:36:07 - 00:18:38:20
And we have a we have a country that's that's being

00:18:39:27 - 00:18:43:08
looked has been built on othering and, you know, for a whole bunch of reasons

00:18:43:08 - 00:18:46:17
that, you know, it's true for most civil societies that, you know,

00:18:46:19 - 00:18:49:17
there's the outgroup in in-group and then you define yourself by who's then

00:18:50:06 - 00:18:52:10
and probably more by who's out.

00:18:52:10 - 00:18:54:15
And Sapolsky has got this came to me with this idea

00:18:55:00 - 00:18:57:17
this these people are really influential to me, which is like, you know,

00:18:58:03 - 00:19:01:06
it's like, what if we, you know, we I probably shouldn't be sharing this

00:19:01:06 - 00:19:03:13
so broadly, but I'll just I'll put it out there. We can talk about it later.

00:19:04:14 - 00:19:08:12
So we know that advertising's effect

00:19:09:11 - 00:19:13:04
or else it wouldn't be $1,000,000,000,000 a year industry, whatever size is,

00:19:13:05 - 00:19:16:29
because it converts people into behavior change to spend money.

00:19:17:11 - 00:19:20:21
Why are we using that technology

00:19:20:21 - 00:19:23:13
to create

00:19:23:13 - 00:19:25:08
emotional

00:19:26:13 - 00:19:28:04
to improve the civil society

00:19:28:04 - 00:19:32:06
by creating emotional feelings of in-group where there's another group dynamics?

00:19:32:06 - 00:19:36:11
So imagine someone with a turban holding a cat or a gay couple with a newborn

00:19:36:21 - 00:19:41:09
or where we know it's like if you can, it's the habit stacking idea.

00:19:41:09 - 00:19:42:27
It's like stack these things together

00:19:42:27 - 00:19:46:10
that are in to something that's out and then by association gets so.

00:19:46:14 - 00:19:48:06
So we're working on

00:19:48:12 - 00:19:52:04
developing some tests we can run.

00:19:52:04 - 00:19:52:23
Of course this is

00:19:52:23 - 00:19:55:24
like we'll be accused of brainwashing, but I'm like, well, like what is it?

00:19:55:24 - 00:19:58:26
It's okay to brainwash to sell you a pack of cigarets that are a jewel.

00:19:59:08 - 00:20:02:25
It's not okay to brainwash you to to be more empathetic.

00:20:02:29 - 00:20:03:20
And so

00:20:04:24 - 00:20:05:03
but so.

00:20:05:03 - 00:20:06:18
Sapolsky is an example of that.

00:20:06:18 - 00:20:09:17
And I would say, like the other influences in my venture career, Dell's been

00:20:09:29 - 00:20:13:01
becoming a radically different you know, you may gather from this call

00:20:13:14 - 00:20:18:17
I thrive on on relational energy that bill is not that way

00:20:18:21 - 00:20:21:03
you know he's a

00:20:21:21 - 00:20:25:03
if there was a CTO of Benchmark, he would be the CTO.

00:20:25:27 - 00:20:26:24
I don't know what I would be.

00:20:26:24 - 00:20:29:29
I would just be maybe I'm marginally more competitive,

00:20:29:29 - 00:20:33:09
but I tend to be he's really good, but it's not a great trait.

00:20:33:09 - 00:20:36:16
But I'm a I'm more prosaic and like connecting with people

00:20:36:16 - 00:20:38:05
because I get so much joy from it.

00:20:38:05 - 00:20:38:28
But I found that

00:20:38:28 - 00:20:41:22
if you think about this as relative to a management team, you know,

00:20:42:16 - 00:20:45:23
we're five partner or four partners that benchmarking our current lineup,

00:20:46:13 - 00:20:47:16
it's better to have

00:20:48:17 - 00:20:50:00
higher for the peaks.

00:20:50:00 - 00:20:52:15
And as they're saying, where there's great peaks, there's great valleys.

00:20:52:21 - 00:20:54:10
This is that old Peter Drucker comment.

00:20:54:10 - 00:20:59:11
And if if you have a group of relational connections in your work,

00:20:59:11 - 00:21:02:17
but also outside of your work that are that are embracing

00:21:02:17 - 00:21:05:26
different peaks, you know, like what Sapolsky does so different than I do.

00:21:05:26 - 00:21:10:05
And and you nurture diversity of every sense in your constellation

00:21:10:05 - 00:21:11:03
of close relationships.

00:21:11:03 - 00:21:14:07
It can't help it, but, you know,

00:21:14:07 - 00:21:17:17
enlarge in your frame and make the world more interesting and more open to you.

00:21:18:13 - 00:21:20:24
But doesn't happen because work goes for 15 years.

00:21:21:02 - 00:21:25:00
We fight like you wouldn't believe and we've evolved as the bickering couple.

00:21:25:00 - 00:21:27:27
Like we can fight and you'll not even know we're fighting.

00:21:28:06 - 00:21:30:01
And you know, or all.

00:21:30:01 - 00:21:32:21
I'll say something that's so subterranean and I'm guilty of this,

00:21:33:02 - 00:21:35:29
that only Bill will know that I've completely offended him.

00:21:37:00 - 00:21:37:25
And so.

00:21:37:25 - 00:21:40:20
But he can't bring it up because it looks completely innocent and, you know,

00:21:41:20 - 00:21:42:24
but and vice versa.

00:21:42:24 - 00:21:43:23
He'll do the same thing to me.

00:21:43:23 - 00:21:46:24
And, you know, I think there's a measure of love beneath that

00:21:46:24 - 00:21:50:01
where, you know, we've you know, we really admire one another.

00:21:50:01 - 00:21:51:06
And Benchmark had this adage

00:21:51:06 - 00:21:53:04
when it was started, which I think every firm

00:21:53:04 - 00:21:57:17
I encourage you to consider of respect and affection, which is that

00:21:57:17 - 00:22:00:10
it's one thing respect your partners, invest money and trust their judgment.

00:22:00:24 - 00:22:02:09
It's another to really admire them.

00:22:02:09 - 00:22:07:14
And and I think to this day, he made out of my army that I have him, I admire him.

00:22:07:14 - 00:22:10:05
And I also see the,

00:22:10:14 - 00:22:14:28
you know, his many and, you know, in a way catastrophic blind spots.

00:22:15:08 - 00:22:16:20
And I know he sees mine. So

00:22:17:24 - 00:22:20:04
that's and so the partnership.

00:22:20:04 - 00:22:23:08
And the road is ending soon with with you two as partners.

00:22:23:08 - 00:22:23:22
Is that right.

00:22:23:22 - 00:22:26:11
But he's not going to be on the next one.

00:22:26:11 - 00:22:26:26
Yeah.

00:22:26:26 - 00:22:29:23
You know he's he in a way that

00:22:31:08 - 00:22:32:03
it's bittersweet.

00:22:32:03 - 00:22:35:05
You don't you don't end at benchmark in a flip switch it's

00:22:35:05 - 00:22:38:07
not binary states attack it's a decade of of

00:22:39:23 - 00:22:41:27
winding down what he observed is something

00:22:41:27 - 00:22:44:20
which I observed which is that the venture business is

00:22:46:03 - 00:22:48:13
it's a useful business and I don't mean use

00:22:48:13 - 00:22:51:22
in terms of years, but it useful in terms of perspective and being in mind.

00:22:52:05 - 00:22:55:12
And I think Bill was recognizing just the same way we he and

00:22:55:12 - 00:22:58:17
I entered the business being very curious about the successful venture capitalist.

00:22:59:07 - 00:23:02:22
We were probably more curious about how they became unsuccessful

00:23:03:04 - 00:23:05:24
because they all do, every one of them,

00:23:06:09 - 00:23:08:27
you know, why didn't you pick your favorite celebrity

00:23:08:27 - 00:23:12:19
venture capital name from the 1990 is Do the Best Deal of 2000.

00:23:12:19 - 00:23:14:01
Why is it that back in 2000,

00:23:14:01 - 00:23:17:05
why am I, you know, effectively irrelevant relatively soon?

00:23:17:05 - 00:23:21:04
And one of our partners, Andy Ratcliffe, retired at age 50, and he said, well,

00:23:21:04 - 00:23:23:03
every benchmark partner has to retire at age 50.

00:23:24:20 - 00:23:27:12
You know, Bill's 54

00:23:27:12 - 00:23:30:00
and IBM shifted all the time so that whenever of I'll as I said,

00:23:30:10 - 00:23:33:08
we want the average age to be 39 here and I joined

00:23:33:08 - 00:23:37:04
we were six tall white men I'm the only white man left in the lineup.

00:23:37:13 - 00:23:40:07
We have Sarah and Jason and Eric.

00:23:40:07 - 00:23:42:20
And by the way, we have a long way to go, just like.

00:23:43:00 - 00:23:45:18
But but the point I'm making is

00:23:45:18 - 00:23:46:10
you don't

00:23:47:13 - 00:23:50:09
as you build a career, you end up attracting a set of,

00:23:51:10 - 00:23:52:28
you know, markers of success.

00:23:52:28 - 00:23:55:26
One of those is wealth and other those is like really great relationships

00:23:55:26 - 00:23:59:15
and other those is outside interests that you're able to then go pursue.

00:23:59:28 - 00:24:02:20
And in the weight of all those things pulls

00:24:02:20 - 00:24:06:05
you out of the discipline of the core business.

00:24:06:05 - 00:24:09:27
And, you know, there's a reason that Gates and Bezos, these people retire

00:24:09:27 - 00:24:12:04
in their mid-fifties because they get other interests

00:24:12:04 - 00:24:16:01
and, you know, who can fault them like it's enough.

00:24:16:02 - 00:24:16:11
You know,

00:24:17:13 - 00:24:18:26
now, if you look at

00:24:18:26 - 00:24:20:29
each of us in our own way, it's like you want to come back

00:24:20:29 - 00:24:24:18
and say what I want to continue doing more of if I have radical freedom

00:24:24:28 - 00:24:26:07
and I can say that everyone on this call

00:24:26:07 - 00:24:30:06
will have years to go by, if not many years to go by where they've

00:24:30:17 - 00:24:34:00
they've imprisoned themselves and systems and habits that don't serve them

00:24:34:07 - 00:24:36:07
because that's what they're supposed to do.

00:24:36:07 - 00:24:40:08
And the more you sort of take agency for what it is that you

00:24:40:23 - 00:24:43:12
are especially drawn to do, that brings you the most meaning

00:24:43:12 - 00:24:45:04
and purpose and joy better.

00:24:45:04 - 00:24:46:14
You better do better to be in your life.

00:24:46:14 - 00:24:49:09
And so I think Bill was saying he just didn't love the hassle

00:24:49:19 - 00:24:51:27
of going out and cold calling the next entrepreneur.

00:24:52:04 - 00:24:55:00
One of the myths about Benchmark in any great firm is that, you know, people

00:24:55:04 - 00:24:56:09
come to us. That's not true.

00:24:57:10 - 00:24:59:02
I think on a rebel core, who's on this call?

00:24:59:02 - 00:25:00:09
You didn't call me.

00:25:00:09 - 00:25:02:08
You know, I reached out to him.

00:25:02:08 - 00:25:04:18
I called Bill, e-mailed him, and.

00:25:05:02 - 00:25:05:25
Okay.

00:25:06:22 - 00:25:08:13
You remember that, you know?

00:25:08:13 - 00:25:11:00
Yeah. And so people

00:25:11:00 - 00:25:14:00
say, well, don't, don't, don't just stand there are catching up now.

00:25:14:26 - 00:25:17:09
You know, we have to really hustle.

00:25:17:12 - 00:25:19:13
And I think that if you're in your mid-fifties

00:25:20:14 - 00:25:24:29
and you've been successful and, you know, it's just you look at someone

00:25:24:29 - 00:25:28:24
who's 26 doing that or 33 doing that and say, am I at the same level now?

00:25:29:09 - 00:25:31:16
So it's funny because in a career, what gets weighted

00:25:31:16 - 00:25:33:04
is usually the extrinsic like,

00:25:33:04 - 00:25:37:13
you know, your outward success or this silly list that people look at.

00:25:37:25 - 00:25:40:01
But what matters is it is intrinsic.

00:25:40:21 - 00:25:43:06
What matters is essentially, which is your hunger, your drive, your

00:25:43:16 - 00:25:45:07
and that's what shows up 3 to 5 years later.

00:25:45:07 - 00:25:48:09
That's the that's the leading indicator, lagging indicators, what you've done.

00:25:48:19 - 00:25:50:21
So I think Bill said and I said the same thing

00:25:50:21 - 00:25:52:09
I'm actually saying question myself is like,

00:25:52:09 - 00:25:55:02
what does all the people respect in this business become shitty?

00:25:55:27 - 00:25:59:16
And then you start to use sports analogies and say, well, it's not really sports

00:25:59:16 - 00:26:00:27
because there's investors like Stan

00:26:02:06 - 00:26:04:19
Druckenmiller or Buffett that get better and better.

00:26:04:19 - 00:26:06:26
So what is it that our business is different?

00:26:06:26 - 00:26:09:19
And I think it's these you need to one of my former

00:26:10:12 - 00:26:13:11
accounting partners and a bunch of excel Arthur Patterson, said,

00:26:13:29 - 00:26:16:13
who's now is like 74 and he still has sunglasses.

00:26:16:13 - 00:26:19:16
Like he's like eventually in probably in your fifties,

00:26:19:16 - 00:26:22:08
you become useless because you know too much.

00:26:22:08 - 00:26:25:17
And I said, Well, explain what that means is when you sit here

00:26:25:17 - 00:26:28:16
in a room with me and he at the time he was in sixties

00:26:29:13 - 00:26:32:14
and this entrepreneur's presenting and you're bobbing your head up and down

00:26:32:14 - 00:26:34:05
and you're getting excited about what he's saying.

00:26:34:05 - 00:26:35:23
You see all the opportunity.

00:26:35:23 - 00:26:38:29
I see every single problem this company is going to have over the next decade.

00:26:39:05 - 00:26:42:22
And I can see his third VP of engineering or Hertha's Herb, ensuring

00:26:42:22 - 00:26:44:28
that we're going to fire because he does not align with accountable.

00:26:44:28 - 00:26:46:06
And it's like so I'm sitting here

00:26:46:06 - 00:26:48:24
looking at all the problems, you're looking at the opportunity, I got to go.

00:26:49:06 - 00:26:52:04
So, so that's one of the issues and I don't say that to be so like,

00:26:52:24 - 00:26:57:21
you know, so, so dark about it, but it's, it's the essential

00:26:59:05 - 00:27:00:09
craft, which is,

00:27:00:09 - 00:27:03:26
you know, you have to be young, hungry, you know, and I think

00:27:03:26 - 00:27:06:15
hungry in the most complete sense, which is that you have a lot to prove.

00:27:06:27 - 00:27:10:27
And then you also, at the same time have to have, you know,

00:27:11:01 - 00:27:13:23
refreshingly little ego about it, because when your ego gets inflated

00:27:13:23 - 00:27:16:02
in the venture business, you get destroyed quickly.

00:27:16:12 - 00:27:17:17
So, you know,

00:27:17:17 - 00:27:20:08
you have to come to work every day as though you're just a 26 year old.

00:27:20:08 - 00:27:21:17
So shit, that didn't either.

00:27:21:17 - 00:27:24:02
If you if you want to sustain, I think Bill probably felt that he was

00:27:24:04 - 00:27:25:15
it was beyond that.

00:27:25:15 - 00:27:27:20
Anyway, that's a long winded answer. But he'll be around

00:27:27:20 - 00:27:30:15
he'll be around for another you know, he's still on ten boards.

00:27:30:15 - 00:27:33:21
So, you know, that's that's 5 to 7 years at least of work.

00:27:34:11 - 00:27:34:29
Yeah.

00:27:35:03 - 00:27:38:15
Now really interesting and I mean just before we

00:27:38:21 - 00:27:42:28
we switch gears into into, you know, topics that are close to both.

00:27:43:09 - 00:27:44:10
So think,

00:27:44:10 - 00:27:45:06
just want to shout out

00:27:45:06 - 00:27:47:28
to the to the audience that we're going to turn to questions soon

00:27:48:12 - 00:27:51:23
and, you know, we've got just an incredible group listening in.

00:27:51:23 - 00:27:54:14
We've got Renaud from Eventbrite, the Decia from Kareem,

00:27:55:15 - 00:27:56:22
plenty of venture

00:27:56:22 - 00:28:01:00
capitalists and funds like this and A16z and Lux and so on, so forth.

00:28:01:00 - 00:28:03:19
So they're going to have a lot better questions than I do. But

00:28:04:23 - 00:28:08:29
and, you know, and just kind of also say something that I think that

00:28:09:08 - 00:28:12:19
when I when I look at, you know, your LinkedIn and I look at things,

00:28:12:19 - 00:28:17:02
I noticed that you're someone with very eclectic tastes and interests as well.

00:28:17:02 - 00:28:19:07
You know, you're on the board of the S.F. Opera.

00:28:19:07 - 00:28:20:08
You're a helicopter pilot.

00:28:20:08 - 00:28:24:21
I read your you know, you run out and you're you're an aspiring to be a cellist.

00:28:24:21 - 00:28:27:21
It says on your core, I don't know if that's still an endearing,

00:28:27:21 - 00:28:31:05
endearing effort, but you know, someone that like you said,

00:28:31:05 - 00:28:33:21
you know, it's it's easy to get locked into into habits.

00:28:33:21 - 00:28:34:23
And, you know,

00:28:34:23 - 00:28:38:08
I can see that you obviously drawn inspiration over the years from from

00:28:38:08 - 00:28:42:04
not just the kind of the bubble of tech, but the broader field.

00:28:42:04 - 00:28:46:20
And if we can just use that to springboard over to the issues that are happening

00:28:46:20 - 00:28:51:03
right now in America and the inequities that that obviously are are

00:28:52:08 - 00:28:54:16
highlighted in the last few days,

00:28:54:16 - 00:28:57:28
but have obviously been prevalent for for hundreds of years.

00:28:58:21 - 00:29:01:16
I'm just curious, you know, what are your what are your thoughts?

00:29:01:16 - 00:29:04:01
What is this sort of assessment that you're making? And,

00:29:05:02 - 00:29:08:11
you know, concretely, I think one question I was

00:29:08:11 - 00:29:12:21
I was suggested to ask to you is what can the venture industry do?

00:29:12:29 - 00:29:18:22
You know, what what what what what role do we play in this as not just as citizens?

00:29:18:22 - 00:29:20:26
Because I think there's a lot of people talking about that.

00:29:21:04 - 00:29:25:13
But as specifically the venture industry, what what role can can

00:29:25:13 - 00:29:27:19
can they play as a leader of it? Yeah.

00:29:28:21 - 00:29:29:14
Yeah.

00:29:30:02 - 00:29:33:14
I appreciate the question in the sense that I am humbled by it

00:29:33:14 - 00:29:37:08
because I feel, you know,

00:29:37:09 - 00:29:40:12
this is one of those areas where actions are so much more powerful words.

00:29:40:12 - 00:29:44:08
And so even talking about it, I don't feel like I'm on a platform

00:29:44:14 - 00:29:50:29
of, you know, being able to have any sort of outsized voice.

00:29:52:00 - 00:29:55:26
The I'll start with the emotional horizon, which is to me

00:29:55:28 - 00:30:00:04
the it's important because it's a personal story.

00:30:00:04 - 00:30:02:13
And I think of it as I'm a person in relation to what's going on.

00:30:03:00 - 00:30:06:08
The emotion around is one of shame and the shame

00:30:06:08 - 00:30:11:08
comes from a broad awareness

00:30:12:01 - 00:30:16:23
that but not an acute awareness of the systemic issues of our society.

00:30:16:23 - 00:30:18:04
And Europe has its issues.

00:30:18:04 - 00:30:21:00
It's not quite as bad as ours, which are both socioeconomic,

00:30:22:08 - 00:30:23:15
race,

00:30:24:00 - 00:30:28:13
gender and in our industry embodies it.

00:30:28:17 - 00:30:30:18
If you just look at the sheer number of dollars

00:30:30:18 - 00:30:35:01
and I don't know what the latest data is, but it's 98% of the capital

00:30:35:22 - 00:30:38:01
in business is gone to male founded companies.

00:30:38:01 - 00:30:41:00
And I think people of color, if you take out Asians

00:30:41:11 - 00:30:42:29
which is you could argue share

00:30:42:29 - 00:30:44:27
not sure they're not underrepresented in our industry.

00:30:45:29 - 00:30:47:00
It's just appalling.

00:30:47:00 - 00:30:48:07
And I think that that sector

00:30:48:07 - 00:30:52:05
in participating the society that our system system that's doing that

00:30:52:27 - 00:30:57:08
and you're benefiting from that system, then you are accountable.

00:30:57:08 - 00:30:58:05
And I can say

00:30:58:05 - 00:31:01:07
the measure of shame comes to the fact that I had clearly not done enough.

00:31:01:07 - 00:31:03:09
And I have started a number of initiatives,

00:31:05:02 - 00:31:06:18
none of which I followed through on.

00:31:06:18 - 00:31:10:25
But the intensity that I will now and in the shame is an emotional

00:31:10:25 - 00:31:13:03
sort of sense of like, you know,

00:31:14:19 - 00:31:16:04
wow, there's so much more that I

00:31:16:04 - 00:31:18:22
that I believe I should have done or could have done.

00:31:19:07 - 00:31:21:26
And I don't have that shame as a motivator to act.

00:31:21:26 - 00:31:23:00
It's more of a negative feeling.

00:31:23:00 - 00:31:25:03
And I get that sort of a

00:31:25:05 - 00:31:26:18
there's another emotion which is,

00:31:27:19 - 00:31:31:15
you know, I guess a measure of a feeling

00:31:33:09 - 00:31:35:27
optimistic isn't exactly a nice way of expressing emotion,

00:31:35:27 - 00:31:37:09
but it's a possibility.

00:31:37:09 - 00:31:38:27
It looks like the same way I would feel about it.

00:31:38:27 - 00:31:41:19
Other things that are just the beginning.

00:31:41:19 - 00:31:43:14
But let me make this concrete.

00:31:43:14 - 00:31:46:14
So when I first met my partners,

00:31:46:26 - 00:31:48:26
you know, a little younger than me and she's

00:31:50:18 - 00:31:52:18
her social circles and her world is

00:31:52:27 - 00:31:55:11
has been more in the activist arena than mine.

00:31:55:26 - 00:31:59:04
And the first piece of basically give to me is that you guys,

00:31:59:04 - 00:32:03:11
you know, you asked your companies to measure the mix of their employees.

00:32:04:10 - 00:32:07:18
Why aren't you doing that publicly with your investments?

00:32:07:18 - 00:32:09:21
And I said, well, you know, that's that's a that's a fair question,

00:32:10:13 - 00:32:12:19
but it's just we don't make that many investments per year.

00:32:12:19 - 00:32:16:02
So it's it's I wonder if it's a small number of thing, just like, that's fine.

00:32:16:19 - 00:32:21:08
Consider opening up the aperture and look at it and measuring

00:32:21:23 - 00:32:25:00
the people that you're meeting with and then look at the companies.

00:32:25:00 - 00:32:27:03
Investments are both upstream and downstream.

00:32:27:03 - 00:32:30:05
So we have a meeting that happens every Monday where we evaluate companies,

00:32:30:20 - 00:32:34:03
but who do you talk to before that and then after you've made the commitment

00:32:34:03 - 00:32:34:29
to invest?

00:32:34:29 - 00:32:36:19
What happens on those companies and those boards?

00:32:36:19 - 00:32:41:18
And so in working on this know, working with a few people

00:32:42:15 - 00:32:45:23
that have a history and trying to build systems like this,

00:32:46:20 - 00:32:49:19
I feel like we have a we have an opportunity probably

00:32:49:19 - 00:32:54:07
that comes out of this to go beyond words and action that is habit forming action.

00:32:54:07 - 00:32:59:06
And to me, habit forming action is a set of obvious, repeatable, measurable

00:33:01:10 - 00:33:04:14
mechanisms that become part of the way we operate.

00:33:04:22 - 00:33:06:09
We don't have that right now.

00:33:06:09 - 00:33:09:04
And so, yeah, we go to our boards and we say we should have a diverse board.

00:33:09:04 - 00:33:13:19
Yes, the company should be diverse, but you know, the state of affairs is awful.

00:33:13:20 - 00:33:15:25
So where the shame comes from and this is hard

00:33:15:25 - 00:33:18:22
for me to talk about because again, I don't think I have done nearly enough

00:33:19:27 - 00:33:23:14
is, well, we're going to pay lip service to it.

00:33:23:14 - 00:33:26:09
A bunch of fucking mental energy was put into what do you tweet about?

00:33:26:23 - 00:33:30:04
And to me there's I get a little sick and queasy when I think about out that it

00:33:30:27 - 00:33:34:02
you know and writing a check which we've all done is the easiest

00:33:34:02 - 00:33:36:00
and probably the most despicable first step.

00:33:36:00 - 00:33:37:29
Because if that's all you're going to do, then you don't.

00:33:37:29 - 00:33:40:00
You know, I think change it helps.

00:33:40:24 - 00:33:45:12
I've been talking to Sherrilyn Ifill, who runs the NAACP Legal Defense Fund.

00:33:45:28 - 00:33:49:04
And, you know, one of the things which I think is a completely fair critique is

00:33:49:20 - 00:33:54:07
I want to invite her to sit down with a handful, 3 to 5 CEOs that I'm

00:33:54:21 - 00:33:57:15
I believe can be major leaders of change.

00:33:58:22 - 00:34:01:26
And in a way, they can't just be heads of social media,

00:34:01:26 - 00:34:04:29
because those are as a separate issues there.

00:34:04:29 - 00:34:07:10
But but but I want to ask her.

00:34:07:10 - 00:34:08:03
Okay.

00:34:08:03 - 00:34:11:23
We represent a global technology industry leadership.

00:34:12:16 - 00:34:16:20
We look at the state of affairs like, well, what can we be doing?

00:34:16:28 - 00:34:20:09
And the advice I got as part of this is like putting the burden

00:34:20:09 - 00:34:22:09
on the people who've been going through the fight

00:34:22:09 - 00:34:25:01
to come up with ideas for us is in a way insulting.

00:34:25:16 - 00:34:28:27
So, you know, what I think we're gonna end up doing is saying inventorying

00:34:29:13 - 00:34:32:18
ten, 15 ideas that we solicited, that we proposed to her

00:34:32:25 - 00:34:36:01
and say these may be the worst ideas ever, but if any of them have any merit,

00:34:36:09 - 00:34:38:05
we want to get behind them and amplified them

00:34:38:05 - 00:34:41:00
and in the end of the ICP Legal Defense Fund, it's just one

00:34:41:27 - 00:34:43:01
challenge, just one voice.

00:34:43:01 - 00:34:44:03
But she's a pretty important one.

00:34:44:03 - 00:34:47:02
She's the lawyer at the frontlines of particularly criminal

00:34:48:04 - 00:34:50:25
the criminal justice systems injustice.

00:34:50:25 - 00:34:53:20
And they, you know, they need more they need more help and all that.

00:34:53:20 - 00:34:56:27
So and it's just like it's a hard thing when you say

00:34:57:19 - 00:35:01:05
this wasn't the event wasn't the issue, it was the

00:35:01:08 - 00:35:04:13
provocation of awareness of the issue that's around us all the time.

00:35:04:27 - 00:35:05:28
And then now

00:35:05:28 - 00:35:09:00
the question is what behavioral changes are we really going to commit to?

00:35:09:16 - 00:35:11:23
And what I find myself wanting to do

00:35:12:07 - 00:35:15:25
which which is not I mean, you could be what Evan did, for example.

00:35:15:25 - 00:35:17:07
That snapshot was great.

00:35:17:07 - 00:35:19:08
But I would tell you that Evan needs to read that message

00:35:19:15 - 00:35:22:09
in five years and ask himself, okay, what you do.

00:35:23:03 - 00:35:26:03
And so I think one of the benefits of public commitments at that level

00:35:26:14 - 00:35:29:10
are that they they then put you into identity.

00:35:29:25 - 00:35:30:29
I think one of the things that we have to

00:35:30:29 - 00:35:34:18
all become, in a sense, is a map our identity to solving this problem.

00:35:34:25 - 00:35:37:02
Because if you don't like your identity, solving the problem,

00:35:37:02 - 00:35:39:09
then you become very defensive about it and you react to it

00:35:39:16 - 00:35:41:00
and then you want it to go away.

00:35:41:00 - 00:35:43:19
And so, so, so my shame comes partly in a sense that like,

00:35:43:20 - 00:35:47:12
I feel like my identity, I wanted to be an activist in this regard,

00:35:47:12 - 00:35:50:07
but the votes towards that personality have not been enough,

00:35:50:14 - 00:35:53:07
and the behaviors towards that personality identity have not been enough.

00:35:53:22 - 00:35:55:26
And that's work that I did.

00:35:55:26 - 00:35:56:19
I've internalized

00:35:56:19 - 00:35:58:15
and it doesn't feel great, but at the same time

00:35:58:15 - 00:36:01:15
I feel the sense of possibility of like, okay, now

00:36:01:15 - 00:36:04:20
it's time to really step up and start to lead in this industry, all of us.

00:36:05:17 - 00:36:10:04
But it's not about yeah, I mean, it's, it's simply not, it's not one thing.

00:36:10:10 - 00:36:10:21
The last thing

00:36:10:21 - 00:36:14:20
that's in all this is that my story it starts also send a really good

00:36:15:25 - 00:36:16:17
public

00:36:16:17 - 00:36:19:15
on I said that slack and I talked to her

00:36:19:15 - 00:36:22:04
known him since the days of Flickr.

00:36:22:13 - 00:36:26:14
He said something which was me that the essential truth in all this,

00:36:27:00 - 00:36:29:22
when problems are abstracted and they're kind of conceptual,

00:36:30:06 - 00:36:33:09
then you can play with them and then leave them in their little place,

00:36:33:09 - 00:36:35:23
in your brain, in your emotional horizon, and not have bothered you.

00:36:36:04 - 00:36:38:29
But when they're in your life and you're next to them and you're living them

00:36:38:29 - 00:36:42:16
and they're they're not abstract, but they're concrete, things change.

00:36:42:16 - 00:36:43:23
And I think there's a way and a measure

00:36:43:23 - 00:36:47:10
which we all have to get a lot closer to the problem being closer is

00:36:47:10 - 00:36:51:07
and look at it in the eyes and, you know, feel what it's like and

00:36:52:17 - 00:36:55:12
the problem it is and then see how you react to it.

00:36:55:17 - 00:36:58:07
Because when when that happens, I think then there's a whole part of you

00:36:58:07 - 00:37:01:02
that gets activated in the most beautiful sense.

00:37:01:02 - 00:37:02:03
But we've built lives.

00:37:02:03 - 00:37:03:11
And during this time of quarantine,

00:37:03:11 - 00:37:06:08
my guess is that most people, the vast majority of people on this call

00:37:06:24 - 00:37:10:15
are in relatively good situations, which is like we're completely

00:37:10:15 - 00:37:12:08
we're not close to the fucking problem.

00:37:12:08 - 00:37:13:08
We're as far away as we have.

00:37:13:08 - 00:37:15:14
We have digital interfaces to it, but we're not.

00:37:16:00 - 00:37:19:16
So I think that's another dimension which is like how do you, you know,

00:37:20:25 - 00:37:24:01
have a more porous membrane between what's going on and

00:37:25:17 - 00:37:28:16
I'm contemplating something I can do that's in the category

00:37:28:16 - 00:37:32:05
of major action that's both measurable and accountable and public.

00:37:32:05 - 00:37:35:09
So that is a intractable part of my identity.

00:37:35:09 - 00:37:36:13
And I look back and say, well, that's

00:37:36:13 - 00:37:39:02
that was the decision I made and I took responsibility for it.

00:37:39:16 - 00:37:43:13
And I'm candidly ashamed I haven't done it.

00:37:43:13 - 00:37:44:07
Thank you.

00:37:44:07 - 00:37:44:28
Thank you for that.

00:37:44:28 - 00:37:47:24
That was thanks for the honesty and candor.

00:37:47:24 - 00:37:52:09
And this is such a huge, huge issue of our times

00:37:52:09 - 00:37:55:17
and no, really, a call a call to action for everyone.

00:37:55:17 - 00:37:58:22
So, you know, looking forward to seeing

00:37:59:08 - 00:38:02:28
how it plays out for you and for your industry.

00:38:02:28 - 00:38:05:20
And as you said, you know, like on the Sapolsky stuff,

00:38:06:14 - 00:38:09:18
you know, we we do need to look it in the eye and connect with these issues

00:38:09:18 - 00:38:12:14
emotionally, not just rationally, because I think that's where,

00:38:12:24 - 00:38:17:22
you know, the real the real change will come about.

00:38:17:22 - 00:38:25:17
And now we turn to Q&A.

00:38:25:17 - 00:38:29:18
So we've got one from Mudassar in Dubai, who's obviously

00:38:29:18 - 00:38:33:14
the founder of Careem, the uber company, you know, very well.

00:38:34:08 - 00:38:37:00
Worth. $3 billion recently. And

00:38:38:21 - 00:38:40:20
we really have to ask this question.

00:38:40:20 - 00:38:43:12
Thank you for being with us today, sir.

00:38:43:13 - 00:38:44:22
Thank you, Eliot.

00:38:44:22 - 00:38:46:02
Thanks, Peter.

00:38:46:04 - 00:38:49:13
As I think you described at the beginning, a super thankful

00:38:49:14 - 00:38:52:00
and thanks for being super open.

00:38:52:00 - 00:38:55:00
The like to shift gears a little bit

00:38:55:17 - 00:38:58:08
and get your perspective on on big tech

00:38:59:00 - 00:39:03:12
and you know sort of to understand your perspective on

00:39:03:12 - 00:39:06:06
what are the implications of of the rise of big tech.

00:39:06:22 - 00:39:10:29
And secondly, how does one compete with big tech

00:39:12:07 - 00:39:15:12
with sort of the financial might they have accumulated

00:39:15:12 - 00:39:20:19
and also sort of the ever growing data that's getting collected?

00:39:20:19 - 00:39:24:06
I'm hoping them for the services to become even better.

00:39:24:18 - 00:39:28:06
So I would love to sort of get your perspective on our doesn't

00:39:28:06 - 00:39:30:22
compete with it and then they keep on getting stronger.

00:39:31:06 - 00:39:34:05
What does that mean for the world as we as

00:39:34:05 - 00:39:37:28
we become more digital overall?

00:39:37:28 - 00:39:39:03
I appreciate the question.

00:39:39:03 - 00:39:44:06
It's actually it's a perspective that I guess I feel like I have some

00:39:45:08 - 00:39:47:22
appreciation of having done this job 20 years.

00:39:47:22 - 00:39:51:04
So I can think of when I got into the business, there was not big tech.

00:39:51:04 - 00:39:54:10
It was, you know, there was no FAANG, you know, all those companies

00:39:54:10 - 00:39:57:01
had market caps of less than 100 billion

00:39:58:07 - 00:40:00:10
and now they're all over a trillion.

00:40:00:25 - 00:40:05:24
So the taxing of big tech, combined with the fact that these are network

00:40:05:24 - 00:40:09:09
of businesses that are experiencing increasing returns to scale.

00:40:09:27 - 00:40:13:15
So the problem's not getting better in

00:40:13:15 - 00:40:16:21
so far as the oxygen they're sucking out of the system is only

00:40:17:12 - 00:40:22:01
and it has to went away just by law of large numbers reached some breaking point.

00:40:22:05 - 00:40:25:05
And I think that breaking point is a form of regulatory intervention.

00:40:25:05 - 00:40:26:11
It could be.

00:40:26:11 - 00:40:28:28
I may be pathologies of size. I don't know.

00:40:28:28 - 00:40:30:23
But it's not I don't see it yet.

00:40:31:22 - 00:40:34:09
So the question I think is

00:40:34:09 - 00:40:37:25
like if you go back again two decades, when I entered the venture business,

00:40:38:10 - 00:40:41:20
the really successful companies had network effects of a different type.

00:40:41:25 - 00:40:42:26
They were what I use

00:40:42:26 - 00:40:46:21
a business terms jargon term as demand side economies of scale.

00:40:46:21 - 00:40:49:27
So so you know, if you're Cisco and you're using a Cisco operating system,

00:40:49:28 - 00:40:51:00
there's some like

00:40:51:04 - 00:40:52:21
demand side, meaning

00:40:52:21 - 00:40:53:08
more people

00:40:53:08 - 00:40:56:14
know how to use the IOC system, Cisco, which means they're more likely to buy

00:40:56:15 - 00:40:57:16
the next company.

00:40:57:16 - 00:41:00:05
But it wasn't a network effect like

00:41:00:05 - 00:41:03:03
Facebook, and it was a network effect like Google, which is advertising

00:41:03:03 - 00:41:06:26
monopoly, where, you know, and plus one that really increases

00:41:06:26 - 00:41:07:20
the value of the system.

00:41:07:20 - 00:41:12:29
Plus, there weren't global scale, you know, dimensions like we have right now. So

00:41:14:01 - 00:41:15:14
my partner, Matt

00:41:15:14 - 00:41:19:29
said shortly before he retired, he's still making investments.

00:41:19:29 - 00:41:22:14
You know, Matt was at the beginning of Facebook,

00:41:22:14 - 00:41:24:15
at the beginning of LinkedIn, and he's like

00:41:24:25 - 00:41:28:12
any investor with us at Instagram and probably was more responsible

00:41:28:12 - 00:41:32:02
for getting us into Uber and Twitter than anyone knows.

00:41:33:08 - 00:41:34:29
And he's like, you know, the three things you need

00:41:34:29 - 00:41:37:25
for this business to create the next 100 billion.

00:41:37:25 - 00:41:40:21
It's not truly our company are a

00:41:41:26 - 00:41:44:19
market dynamic where distribution is open

00:41:46:18 - 00:41:48:15
and I'll get back to these in a second.

00:41:48:15 - 00:41:51:11
Capital is relative scarce

00:41:51:11 - 00:41:54:10
and as a new platform like it's some new thing.

00:41:54:10 - 00:41:54:29
Right.

00:41:55:02 - 00:41:58:24
And I probably I think number one or number three are mirror images

00:41:58:24 - 00:42:01:15
because distribution is in a new platform because now it's there

00:42:01:27 - 00:42:04:01
and he says it right now we have two fucking opposite.

00:42:04:01 - 00:42:06:12
We have distribution channels are all clogged.

00:42:06:25 - 00:42:08:28
The app stores are controlled by the incumbents.

00:42:09:09 - 00:42:12:06
All the pathways like launching and leveraging distribution,

00:42:12:06 - 00:42:14:12
which is what Facebook just wrote on the back of Hotmail,

00:42:14:26 - 00:42:17:12
know people forget that distribution for LinkedIn was just easy.

00:42:17:12 - 00:42:18:13
It was just like, you know,

00:42:18:13 - 00:42:20:00
and then there's a whole generation of companies

00:42:20:00 - 00:42:22:09
that that I've invested in that just wrote on the back of Google

00:42:22:12 - 00:42:24:16
CEO free distribution.

00:42:24:16 - 00:42:26:25
So distribution is now kind of congested.

00:42:26:25 - 00:42:29:23
Capital is abundant even with the crisis we're going through

00:42:30:19 - 00:42:33:26
and there's doesn't feel like a new platform,

00:42:33:26 - 00:42:36:26
you know, and so you speculate, okay, what is that new point of dislocation

00:42:36:26 - 00:42:38:14
where the incumbents are going to be flat footed,

00:42:40:09 - 00:42:41:27
it's going to be social.

00:42:41:27 - 00:42:47:08
Now, I think we historically have underappreciated, hidden

00:42:47:08 - 00:42:50:14
in plain sight new platforms because they sort of,

00:42:51:15 - 00:42:53:24
you know, they're my perspective at the moment

00:42:53:24 - 00:42:57:27
is that the jam stack API based developers are going to end up

00:42:57:27 - 00:43:01:11
having a infinitely bigger influence, overstating it.

00:43:01:11 - 00:43:03:26
But just say like orders of magnitude or impact on this world

00:43:03:26 - 00:43:05:11
in a decade than they are today.

00:43:05:11 - 00:43:07:14
And developers want to write to APIs.

00:43:07:14 - 00:43:09:28
The API ecosystems are not owned by the incumbents.

00:43:09:28 - 00:43:12:04
Okay, Amazon does have the APIs rate that you ask,

00:43:12:04 - 00:43:14:08
but they don't have it for the application universe.

00:43:14:08 - 00:43:16:26
Everything that was ever put in the mainframe payment

00:43:16:26 - 00:43:19:08
processing telephony is moving to an API

00:43:20:11 - 00:43:21:05
booking travel.

00:43:21:05 - 00:43:22:09
And so

00:43:22:09 - 00:43:25:07
I think that's a new platform personally, but that's a matter of perspective.

00:43:25:08 - 00:43:27:03
It's not like, you know, it's not the iPhone.

00:43:28:09 - 00:43:29:13
The iPhone was a thing, right?

00:43:29:13 - 00:43:32:24
You could see generations of hundred billion companies get launched on it.

00:43:33:07 - 00:43:37:17
So so the new platform question is really the thing I guess I'm struggling with.

00:43:37:23 - 00:43:41:14
We wanted blockchain and crypto to be that.

00:43:41:14 - 00:43:45:23
I had a strong point of view that that I think I don't know if I'm wrong

00:43:46:04 - 00:43:48:28
long term I'm definitely wrong short term that a company like Telegram

00:43:49:26 - 00:43:52:07
could take, you know,

00:43:53:09 - 00:43:58:08
a large user base and connected to, you know, crypto and particularly what

00:43:58:08 - 00:44:00:29
they were doing with their, their time, which got shut down by the FCC.

00:44:01:12 - 00:44:03:09
But the crypto might provide a new platform,

00:44:03:09 - 00:44:07:18
but instead it's become sort of the realm of exotic

00:44:07:23 - 00:44:12:09
thought and science fiction with some underlying interesting, cool

00:44:12:09 - 00:44:15:29
things like the store value for Bitcoin, which is something I didn't see then.

00:44:17:01 - 00:44:17:15
But beyond

00:44:17:15 - 00:44:21:01
that it's not vrr you know, we've been pretty negative on that.

00:44:21:01 - 00:44:25:08
I think there's a for sure feeling that in the next 20 years that that ends up

00:44:25:08 - 00:44:27:09
being a dislocation point.

00:44:27:09 - 00:44:30:16
But, but, but to your earlier point, Mark, Mark

00:44:30:16 - 00:44:33:22
bought the insurance policy and he wanted Oculus

00:44:33:22 - 00:44:35:24
not because he was going to make our goals successful over a year.

00:44:35:24 - 00:44:39:05
He's just like, If it's not that, then what is it like?

00:44:39:07 - 00:44:39:23
What is it?

00:44:39:23 - 00:44:43:26
If it's not a sense of immersive metaverse and like,

00:44:43:28 - 00:44:47:09
that's that's sort of an inevitability over the course of time.

00:44:47:09 - 00:44:49:10
We all read Ready player one But,

00:44:49:12 - 00:44:52:11
but that's not an investment thesis for a startup, you know, it's it's

00:44:53:04 - 00:44:57:02
so, so, you know, I mean, I think of it a little bit like Penn Computing back

00:44:57:02 - 00:45:01:10
when Apple had the Newton and Microsoft had their tablet division.

00:45:01:23 - 00:45:04:22
This was like 15 years before, you know, the iPhone.

00:45:05:06 - 00:45:05:29
They were all right.

00:45:05:29 - 00:45:07:26
They were just they were way, way early.

00:45:07:26 - 00:45:10:03
I think VR is their person at the moment.

00:45:10:16 - 00:45:12:11
So then it comes back to the Russian whereas new platform

00:45:12:11 - 00:45:15:02
and we're casting about for it. The one thing I can say

00:45:15:02 - 00:45:17:20
is that the beautiful thing about entrepreneurship is that

00:45:18:28 - 00:45:19:17
it finds

00:45:19:17 - 00:45:22:18
it like we don't need to know it, it finds it.

00:45:22:18 - 00:45:24:16
And I think the more we get into our head

00:45:24:16 - 00:45:26:09
in, the more we have theories about the world,

00:45:26:09 - 00:45:28:13
the more we miss what's right in front of us.

00:45:28:13 - 00:45:31:13
So one of my last big investments was our table.

00:45:31:23 - 00:45:34:17
And it's just a database, you know,

00:45:34:25 - 00:45:37:18
that it consumer is the creation of a database.

00:45:37:18 - 00:45:40:24
And my belief is and here's I'll say something grandiose, which is that

00:45:41:15 - 00:45:44:21
I think the really big companies, you know, we work in mantra business

00:45:45:05 - 00:45:47:25
and every decade 3 to 5

00:45:47:25 - 00:45:50:14
companies generate what feels like 90% of the return.

00:45:51:00 - 00:45:54:03
So, you know, in a decade of 2000, I was at Excel and we invested in

00:45:54:03 - 00:45:54:20
Facebook.

00:45:54:20 - 00:45:57:11
Pixel had just done Facebook and nothing else for that decade.

00:45:57:28 - 00:45:59:25
The returns might have gone up.

00:45:59:25 - 00:46:01:23
And so one company. Right. Can do this.

00:46:01:23 - 00:46:05:11
And so we asked the question of like, what are the attributes of the companies

00:46:05:11 - 00:46:07:27
that can get to 100 billion or get to $1,000,000,000,000 market cap?

00:46:08:08 - 00:46:11:18
And I point three I can point to that are sort of observable are

00:46:11:29 - 00:46:14:00
they're not just consumer business, they're both

00:46:14:00 - 00:46:16:24
so they appeal to the entire economy, not just the subsegment.

00:46:17:03 - 00:46:18:00
They're counterexamples.

00:46:18:00 - 00:46:21:25
I know, but certainly that's the case for Apple and Google and Facebook

00:46:22:17 - 00:46:24:16
and Amazon for sure.

00:46:24:16 - 00:46:27:11
Secondly, their platform businesses, which is they attract

00:46:27:11 - 00:46:28:22
millions of developers.

00:46:28:22 - 00:46:31:20
And so, you know, you can read into Ben Thompson's trajectory.

00:46:31:20 - 00:46:33:17
Some of those developers are being aggregated

00:46:33:17 - 00:46:35:14
in the case of Google and Facebook and others,

00:46:35:14 - 00:46:38:12
they're being enabled in the case of Microsoft and Amazon.

00:46:38:26 - 00:46:40:21
But there's still millions of developers.

00:46:40:21 - 00:46:42:07
And then thirdly,

00:46:42:07 - 00:46:45:00
and this is the part that's that's to me, the most beautiful is that they

00:46:45:12 - 00:46:48:12
they expand the consumption of what it is that they're in

00:46:49:02 - 00:46:51:06
by orders of magnitude, the market that they're in.

00:46:51:06 - 00:46:52:01
So, you know,

00:46:52:01 - 00:46:56:05
we get this business school logic of like you got to invest in big markets.

00:46:56:05 - 00:46:57:24
And I think that's absolute horseshit

00:46:57:24 - 00:47:01:24
because the markets that you invest in that exist never generate great returns.

00:47:01:24 - 00:47:04:00
It's the markets that don't exist that you create

00:47:04:00 - 00:47:05:25
and if you're enabling consumption,

00:47:05:25 - 00:47:07:14
like what was the search market before Google,

00:47:07:14 - 00:47:09:05
what was the operating system for Microsoft?

00:47:09:05 - 00:47:10:20
What was the cloud business before Amazon?

00:47:10:20 - 00:47:14:21
So the the the sort of backwards

00:47:14:21 - 00:47:18:02
thinking, the outcome thinking of big tam so myopic.

00:47:18:02 - 00:47:20:25
And the fastest way for me to get to get uninterested in

00:47:20:25 - 00:47:23:05
the company is someone says this is a huge market.

00:47:23:05 - 00:47:24:21
We can just get 3 to 5% of it.

00:47:24:21 - 00:47:28:15
And that violates everything I know to be true about a good investment.

00:47:29:01 - 00:47:33:21
I want the small market that you make huge and you know, come back to their table.

00:47:34:05 - 00:47:36:06
I think they satisfy those three criteria.

00:47:36:07 - 00:47:38:20
Now, we could fuck it up in any number of ways,

00:47:38:20 - 00:47:41:01
but but the number of people who start using your table and say,

00:47:41:01 - 00:47:43:04
I didn't know I needed a database for this, but my God.

00:47:43:12 - 00:47:45:26
And by the way, I want to make some application logic on top of it.

00:47:45:26 - 00:47:47:27
Next thing you know, they've built a custom app

00:47:47:27 - 00:47:51:00
that's driving part of their business and that's just like it's like that.

00:47:51:00 - 00:47:56:00
No limit to it in so so those things are like this big tech on that Microsoft

00:47:56:17 - 00:47:58:10
came out with Microsoft lists

00:47:58:10 - 00:48:00:25
one of the things that a very intelligent person said to me

00:48:00:25 - 00:48:05:00
when big tech chooses to compete with you and this is a person I can't say

00:48:05:00 - 00:48:09:01
what it's not like contain alluded to it allowed him but he's a person who

00:48:09:05 - 00:48:10:08
you should know because he's

00:48:11:22 - 00:48:14:08
you know, on top of a very big tech company.

00:48:14:08 - 00:48:16:11
So when a big company chooses to compete with you,

00:48:17:11 - 00:48:22:08
oftentimes you overestimate the immediate impact on your business

00:48:22:23 - 00:48:24:26
because you think, oh, shit, okay, they're coming after us

00:48:24:26 - 00:48:26:28
and then it's going to be an instant freefall.

00:48:27:20 - 00:48:29:13
And it's usually not that way.

00:48:29:13 - 00:48:32:22
But you tend to underestimate the long term impact.

00:48:32:28 - 00:48:34:14
You tend to underestimate the long term impact

00:48:34:14 - 00:48:38:14
because somehow they're connecting their monopoly, their distribution

00:48:38:14 - 00:48:41:18
advantage, their capital advantage

00:48:41:29 - 00:48:43:20
over a sustained period of time,

00:48:43:20 - 00:48:46:10
their systems of competitive advantage will find your weakness.

00:48:46:28 - 00:48:49:01
They don't tend to find it on day zero.

00:48:49:01 - 00:48:50:25
So this competition was doomed.

00:48:50:25 - 00:48:53:15
No one's going to take zoom out with a symmetric attack. No.

00:48:53:16 - 00:48:57:03
No chance somebody will come out of that the angle at the side or slack.

00:48:57:17 - 00:49:00:19
No. So slack so that we should be worried about but about Microsoft.

00:49:00:19 - 00:49:01:21
Oh, yes, they should.

00:49:01:21 - 00:49:02:27
And and it's not because they're going

00:49:02:27 - 00:49:05:02
to build a better product, not going out slack. Slack.

00:49:05:02 - 00:49:07:04
They're going to tie it to their distribution mate.

00:49:07:16 - 00:49:10:13
That whole part of the market that didn't have a chance to experience

00:49:10:13 - 00:49:13:08
slack, they're going to they're going to then bring them into their teams product.

00:49:13:08 - 00:49:16:20
And my experience of this was was Facebook fighting with Google

00:49:17:01 - 00:49:17:24
and we're at Twitter.

00:49:17:24 - 00:49:21:06
And the joke was like, when Facebook starts to shoot or Google starts to shoot,

00:49:21:06 - 00:49:24:23
Facebook one's going to miss and hit us and is exactly what happened.

00:49:24:23 - 00:49:28:10
So now Twitter also shot itself 16 times in every major organ,

00:49:29:03 - 00:49:31:17
but come back to that later you want.

00:49:31:28 - 00:49:33:14
But what happened in the case of Facebook?

00:49:33:14 - 00:49:37:05
Google is Google came out with Emerald, which is their competitor to Google Plus.

00:49:37:05 - 00:49:39:18
Right. It was their competitor. Facebook.

00:49:39:18 - 00:49:42:24
And so Facebook had to reify their commitments to the feed

00:49:43:07 - 00:49:45:05
because that was something that they had liquidity against.

00:49:45:05 - 00:49:46:27
They didn't Google questionable liquidity.

00:49:46:27 - 00:49:50:25
So the feed was what the one thing that's what it really had that was different

00:49:51:03 - 00:49:54:11
and that evaporated when Facebook responded to Google and

00:49:54:20 - 00:49:56:05
but then dual came back

00:49:56:05 - 00:49:59:04
and it started to really chip at Facebook's position on photos.

00:49:59:15 - 00:50:03:14
And, you know, it's always so so that anyway like I know this is big tech.

00:50:04:03 - 00:50:07:09
It could eventually find you and you were right to be paranoid

00:50:07:09 - 00:50:10:28
about it, but it does come back to sustainable competitive advantages.

00:50:10:28 - 00:50:12:11
The thing that you have to be obsessed

00:50:12:11 - 00:50:14:11
with in your business and have some personal version of,

00:50:14:24 - 00:50:15:23
I think Tobi by the way,

00:50:15:23 - 00:50:18:10
probably is a great example of somebody who's done that lately.

00:50:18:10 - 00:50:20:23
And I had the which I don't know

00:50:22:07 - 00:50:23:12
why it's called

00:50:23:12 - 00:50:27:21
a not only this is what I hear about like embarrassment, guilt, shame.

00:50:27:21 - 00:50:29:28
Tobi and I formed a really good friendship at the beginning.

00:50:29:28 - 00:50:31:08
Before he raised any money,

00:50:31:08 - 00:50:33:23
he offered me to buy a third of the company for $1,000,000.

00:50:35:18 - 00:50:37:22
I introduced him to Reid Hoffman and I said, Hey,

00:50:38:00 - 00:50:39:09
you should probably do this deal

00:50:39:09 - 00:50:42:12
because it's a Canada company and it's, it's, you know, it's, it's it's

00:50:42:12 - 00:50:43:15
white label e-commerce.

00:50:43:15 - 00:50:46:28
And he wasn't B Reid was just at LinkedIn at times probably good for you.

00:50:46:28 - 00:50:49:26
But it seemed by $34 million.

00:50:49:26 - 00:50:53:23
I think the market cap now is 100 million or so.

00:50:53:24 - 00:50:54:28
A little embarrassing.

00:50:54:28 - 00:50:58:14
But the way Toby's competed against Amazon is a really potent lesson

00:50:58:14 - 00:51:00:07
on how to compete with big tech,

00:51:00:07 - 00:51:03:12
because he took a point of differentiated focus,

00:51:03:24 - 00:51:08:26
maniacally focused on the the merchant, the merchant, not the consumer.

00:51:08:26 - 00:51:09:25
The merchant.

00:51:10:06 - 00:51:14:23
Amazon's maniacally focused on the customer and on the end user.

00:51:15:07 - 00:51:17:14
So he saw that as a place to compound

00:51:18:05 - 00:51:21:05
and grow but not go for symmetric competition.

00:51:21:12 - 00:51:22:15
And it worked.

00:51:22:15 - 00:51:25:26
And now he can actually launch he launched Shopify Marketplace,

00:51:26:05 - 00:51:27:26
he can start to fuck with their core business

00:51:27:26 - 00:51:30:00
because he has a position of competitive strength.

00:51:30:00 - 00:51:31:16
So I think it's possible

00:51:31:16 - 00:51:35:05
and I know your business, you're doing it and but it requires, you know,

00:51:35:18 - 00:51:39:09
a clear differentiated focus that the incumbents can't see.

00:51:39:10 - 00:51:41:27
And so one woman answered your question.

00:51:41:27 - 00:51:43:19
But it does it does worry me.

00:51:43:19 - 00:51:47:26
Some of it very important topic, especially going into the next decade.

00:51:48:17 - 00:51:49:17
Peter, a question for you.

00:51:49:17 - 00:51:53:02
You mentioned that experience and knowledge

00:51:53:02 - 00:51:56:26
can can be a liability and, you know, in the long term,

00:51:57:08 - 00:52:01:12
what what experiences, what knowledge you think can be an asset

00:52:01:12 - 00:52:06:03
and which be constantly revisited and discarded all the time.

00:52:06:03 - 00:52:07:19
You know, I try and have a rolling

00:52:09:25 - 00:52:12:05
but adaptable

00:52:12:13 - 00:52:15:13
list of five books that I recommend to the CEOs I work with

00:52:16:00 - 00:52:19:23
that are essential reading and the core curriculum for lack of a better term.

00:52:20:06 - 00:52:24:14
And what I found is that those tend to be what they shift.

00:52:24:14 - 00:52:27:19
And this is the five temptations of the CEO, one of those books,

00:52:28:15 - 00:52:31:17
the have ever encourage anyone to read the book range.

00:52:31:17 - 00:52:33:28
It's not a particularly well written book, but it's a really helpful book.

00:52:35:01 - 00:52:37:11
The 15 Principles of Conscious Leadership.

00:52:37:11 - 00:52:40:28
And I'm happy to say that if you guys want to follow up on that,

00:52:41:23 - 00:52:45:13
the the part of it that's become more consistent

00:52:45:13 - 00:52:48:21
that I've definitely gained from experience

00:52:48:21 - 00:52:51:20
has to do more with human psychology

00:52:52:05 - 00:52:55:26
than it has to do with, you know, market forces and rules

00:52:56:29 - 00:53:00:17
like there are some rules like don't back small, medium business companies.

00:53:00:17 - 00:53:01:29
That was like a rule in the venture business

00:53:01:29 - 00:53:04:14
that kept people out of doing Zendesk.

00:53:04:14 - 00:53:06:01
And we did Zendesk and or Shopify.

00:53:06:01 - 00:53:08:19
In my case, small businesses are terrible customers.

00:53:08:19 - 00:53:09:29
You know, they bitch and moan.

00:53:09:29 - 00:53:13:08
It costs a ton of money to support and they don't give you very much in return.

00:53:13:16 - 00:53:14:27
It turns out that's like Stripe.

00:53:14:27 - 00:53:16:21
It's a Shopify you have to point.

00:53:16:21 - 00:53:20:12
So business logic doesn't age.

00:53:20:12 - 00:53:21:05
Well, my experience,

00:53:21:05 - 00:53:23:22
especially when it's like the world will be this way in the future.

00:53:24:22 - 00:53:27:08
Human nature does.

00:53:27:08 - 00:53:30:24
And I can tell you the experiences that I'm able to help my partners

00:53:30:24 - 00:53:33:16
with most that are younger relate to management changes.

00:53:34:19 - 00:53:36:12
When do we move on from this executive?

00:53:36:12 - 00:53:40:20
When do we, you know, and then particularly when you're

00:53:40:20 - 00:53:44:12
when a founder CEO transition occurs, how is that likely to play out?

00:53:44:12 - 00:53:47:15
And I've seen a lot of them and I hate them and, you know,

00:53:48:19 - 00:53:49:21
I have a lot of wisdom there

00:53:49:21 - 00:53:51:26
that I think is immediately applicable and can help people.

00:53:51:26 - 00:53:55:10
These situations, obviously, you know, we could talk about Uber.

00:53:56:00 - 00:53:57:19
That was a particularly graphic version of it.

00:53:57:19 - 00:54:01:24
It's just still traumatizing for us to even reflect on that.

00:54:01:24 - 00:54:06:00
But the human nature side, the human psychology that compounds my experience.

00:54:06:00 - 00:54:09:09
You can never stop growing and learning there and the experience

00:54:09:09 - 00:54:13:02
really is relevant and it's relevant and helping people grow and adapt.

00:54:13:03 - 00:54:16:04
Hi, nice to meet you along with that, I guess

00:54:16:04 - 00:54:18:23
just asking you a question around your decision making process

00:54:19:17 - 00:54:23:25
and you know, as you you talked about, experience can be a liability, but

00:54:24:02 - 00:54:28:17
how do you balance that with, you know, obviously the experience is very helpful,

00:54:28:24 - 00:54:33:03
but also trying to, you know, remove inherent biases.

00:54:33:03 - 00:54:35:15
And if you could share with us maybe two or three years sticks

00:54:35:17 - 00:54:38:26
that you used for quick decision making, that would be super helpful.

00:54:39:04 - 00:54:39:16
Thank you.

00:54:40:16 - 00:54:43:03
We in the industry are sort of very

00:54:43:03 - 00:54:46:08
thin skinned about missing things, so we always keep track of the misses.

00:54:46:08 - 00:54:46:14
Right.

00:54:46:14 - 00:54:48:22
Can we go back and say, okay, what do we get wrong? So

00:54:49:22 - 00:54:53:01
and doesn't there's a great saying I use when I'm recruiting people and

00:54:54:08 - 00:54:57:16
I can't remember a quote, but it's

00:54:57:16 - 00:55:01:13
I don't remember who said it first, which is embarrassing, but regret

00:55:01:15 - 00:55:05:05
for the things we do fades in time.

00:55:05:05 - 00:55:09:22
It's for the things that we don't do that it's inconsolable.

00:55:10:04 - 00:55:11:11
The regrets inconsolable.

00:55:11:11 - 00:55:12:13
So if you're Bill Gurley

00:55:12:13 - 00:55:16:29
and you didn't do Google in 1999, you got a shot to do it every day.

00:55:16:29 - 00:55:19:10
You get to think about that because Google didn't go away.

00:55:19:25 - 00:55:24:29
And so, you know, in my case at Shopify or I guess at some level, I could have done

00:55:24:29 - 00:55:29:00
YouTube and I have my list and, you know, you could live in regret.

00:55:29:00 - 00:55:31:18
It sucks. That's no way to, you know, have a decent life.

00:55:31:18 - 00:55:33:17
But but it's a provocation to say,

00:55:33:17 - 00:55:37:12
okay, well, what did we get wrong and what will we do in each case?

00:55:37:12 - 00:55:41:18
You sort of there's that that explicit definition of the mis

00:55:42:01 - 00:55:44:23
and an ownership and a vulnerability to how you got there.

00:55:45:05 - 00:55:49:07
And, and there's the misses that like that I think we're comfortable with like,

00:55:49:08 - 00:55:51:02
okay, we missed that, but we wouldn't have ever done that.

00:55:51:02 - 00:55:52:12
That's just not who we are.

00:55:52:12 - 00:55:54:19
Then there's the messages that say, Hey, we better change who we are

00:55:54:19 - 00:55:58:03
because that's not acceptable, and it shows that we're just closed.

00:55:58:03 - 00:56:01:04
And the part that I would say more broadly that

00:56:01:04 - 00:56:03:19
I would want to flag is where we've become.

00:56:04:05 - 00:56:09:04
You know, again, ridiculously one sided male,

00:56:09:27 - 00:56:13:29
privileged white male founders or Asian white male founders.

00:56:14:12 - 00:56:17:01
Now, where are we getting it wrong with regards to that.

00:56:17:13 - 00:56:19:10
And I think one of the things this is getting back to the other topic,

00:56:19:10 - 00:56:21:17
we have this defensiveness in the industry saying, well,

00:56:21:18 - 00:56:25:13
if you were sitting in our Monday partner room, if the person was presenting

00:56:25:13 - 00:56:26:24
behind a screen

00:56:26:24 - 00:56:29:03
like we would give the same answer because we're just responding

00:56:29:03 - 00:56:30:21
to the facts of the business.

00:56:30:21 - 00:56:32:17
And that's just not true.

00:56:32:17 - 00:56:33:21
It's just not true.

00:56:33:21 - 00:56:37:22
So I think we have to do a lot of work to make it more explicit what's implicit

00:56:38:04 - 00:56:42:09
and then ask the question of, okay, well, you know, how does that change behavior?

00:56:42:21 - 00:56:45:23
And you've heard the example of like when they do tryouts for orchestras

00:56:46:08 - 00:56:48:16
and, you know, in Europe they don't

00:56:49:23 - 00:56:50:16
there's not a screen.

00:56:50:16 - 00:56:52:11
In the United States they put a screen and you can't see.

00:56:52:11 - 00:56:54:27
And then as soon as they did that, the diversity of the orchestra exploded.

00:56:55:09 - 00:56:58:11
The of people with the act would only go up if we had a, you know,

00:56:58:25 - 00:57:01:17
rich tapestry of different perspectives that we're backing.

00:57:01:17 - 00:57:05:16
So that's that's something we have a lot of work to do on no question.

00:57:05:16 - 00:57:08:06
So anyway, there's there's the human psychology piece.

00:57:08:06 - 00:57:09:16
I cannot say enough about it.

00:57:09:16 - 00:57:11:27
If anything, it's like if you want to be the venture capitalist in the long term,

00:57:13:23 - 00:57:17:02
consider getting a degree in psychotherapy

00:57:17:11 - 00:57:19:19
because it will be very helpful.

00:57:19:19 - 00:57:21:18
Maybe close, close things off right now.

00:57:21:18 - 00:57:23:23
And thank you for making a time.

00:57:23:23 - 00:57:28:21
Maybe one last thought is, you know, you've had this incredible career up

00:57:28:21 - 00:57:29:07
until now.

00:57:29:07 - 00:57:32:29
And as you said, maybe 50 is the age that people retire at.

00:57:33:13 - 00:57:36:27
And I'm just curious kind of in these last few years

00:57:36:27 - 00:57:39:19
that you probably will be investing kind of what are

00:57:39:23 - 00:57:42:00
what are you hoping to achieve and what are the what are the

00:57:42:05 - 00:57:45:01
what are the things you're going to put your mind to?

00:57:45:01 - 00:57:46:29
Yeah, I think this is I appreciate that.

00:57:48:06 - 00:57:50:00
I do see, I guess some form of a finish

00:57:50:00 - 00:57:53:14
line of this form of my working in the entrepreneurial ecosystem.

00:57:54:00 - 00:57:56:04
The two things that are most important are,

00:57:56:14 - 00:57:59:08
you know, to me having left a,

00:58:00:02 - 00:58:03:13
a significant provocation

00:58:03:13 - 00:58:09:01
and then an actual manifestation of change in the face of our industry.

00:58:09:01 - 00:58:12:08
As much as I'm a representative of the old, I'd like to like leave

00:58:12:08 - 00:58:15:15
with a provocation and sort of an embodiment of the new.

00:58:15:26 - 00:58:18:11
And to me that's the face of benchmark has changed.

00:58:18:11 - 00:58:19:26
But I think the face of our portfolio

00:58:19:26 - 00:58:21:25
should change in the way that it represents.

00:58:21:25 - 00:58:24:25
And I'd like to know that I didn't just pay lip service to it.

00:58:24:29 - 00:58:26:29
That matters deeply to me.

00:58:26:29 - 00:58:29:23
The other thing is that, you know, one always hopes in the venture business to,

00:58:31:07 - 00:58:33:10
you know, it's the great white whale Moby Dick, like

00:58:33:12 - 00:58:38:09
have their last great company, you know, and I don't know that

00:58:38:09 - 00:58:41:13
I feel that way because it's not that's not as meaningful to me.

00:58:41:24 - 00:58:44:02
But I would love to to

00:58:44:02 - 00:58:46:07
I typically commit to an entrepreneur of my

00:58:46:07 - 00:58:49:23
I work with for ten plus years I would love to take into my fifties,

00:58:50:24 - 00:58:53:13
you know, 3 to 5 relationships that bring me

00:58:53:13 - 00:58:56:11
the joy that I've had in the last 20 years doing this job.

00:58:56:15 - 00:59:00:28
And I actually don't spend less important to me that there that there home runs.

00:59:01:04 - 00:59:02:11
It's more important to me the companies that

00:59:02:11 - 00:59:04:23
I really feel passionate about working with.

00:59:04:23 - 00:59:05:25
Fantastic.

00:59:05:26 - 00:59:08:12
Well, thank you and really appreciate you taking the time.

00:59:08:12 - 00:59:10:15
This is I learned a lot. I'm sure everyone else did. And

00:59:11:18 - 00:59:11:25
I hope

00:59:11:25 - 00:59:15:02
your you and your family staying safe in these challenging times.

00:59:15:02 - 00:59:17:22
And I

00:59:20:21 - 00:59:24:14
will.