Sequoia's Doug Leone on Building Enduring Companies in the AI Era - ElevenLabs Summit London 2026

Please welcome Doug Leone from Sequoia Capital, joined by ElevenLabs co-founder Mati Staniszewski.

Thank you so much for staying through the day towards our final session. And it's an absolute pleasure to have Doug Leone with us here, someone I got to watch online, I got to watch as an audience member, and today a pleasure to be able to interview Doug. So maybe a quick introduction to Doug. Doug, for the last 30 years, has been building and leading one of the most influential venture firms in the world, Sequoia. He has seen multiple technology transformations and waves: semiconductors, internet, mobile, cloud, and now AI. You've been behind some of the iconic investments, ServiceNow and Nubank, and expanded Sequoia globally, something that's so familiar, key for so many of you here as well. So there's no one better than you to help us understand how we should prepare for that next era.

But before we do that, let's kick off with a very different question. What's the biggest screw-up you ever did as an investor?

So I chuckled that you mentioned semiconductors. Like you might as well have gone back to the Adam and Eve. That's how old you made me. I was in high school during the summering doctor phase, but it's funny how history gets rewritten. So the biggest group. Well, first of all, thank you for the nice question to start. My number one mistake was not to dream enough. Founders dream. And when you come to us with these tales, and I use the word tales because that's all they are at the beginning. There's no proof. The courage to ask yourself what happens if everything goes right. We've learned to do that over the years, but I've always been a person that likes to see a little bit of order. And I've learned over the years that entropy, chaos, is really what you need in the early days.

So, my number one error would be not to dream with the founders early enough, because the thing I've learned since: when the companies work, they surprise you on the upside. The companies become far more than you could ever imagine. We were the first investor in NVIDIA. Would I ever imagine that a graphics chip company would become an AI company? Would I have imagined that a search engine company, where we didn't know what it was good for, turned out to be Google, or that this little company with a processor, Apple, would turn out to be what it is? Those were all companies where we had the pleasure of being the first institutional investors, and yet we didn't get to dream as much as the founders.

So, that's the biggest mistake I think I've made over my career.

Thank you, Doug. There's a lot of dreamers here, but you have one concept that many people I spoke with attribute to a lot of the work of how you think about investment and business, which are the laws of physics. Can you unpack this a little bit more? What are those laws of physics?

So, first of all, how that started. We had a China operation, an India operation, but now I want to focus on the China operations, where it was first-generation Chinese running at a pace you've never seen, raising money at a pace you've never seen. And I used to argue with the then-leader, argue—I used to have conversations of: what are the principles you want to write in pen that never change through generations, through cultures, through geographies, and what are the principles you write in pencil—the things you write in pencil, things like strategy. And I thought we had to get those right, because if we got those wrong, we would get a lot of other things wrong. So, I'll tell you what they were in investing, and then for corporations, I'll give you just one or two.

For example, in investing, a law of physics was the bigger the fund, the lower the returns. the multiple, it's very easy to do a 20 times fund on a $10 million fund. It's almost impossible to do a 20 times fund in a $2 billion fund or quality of due diligence versus return or speed of decision versus return. And then I translate those into corporations. Jeff Bezos talked about type one decisions, type two. The type ones are the one that you should really take a long time in making. Type 2 are the ones that you better make quickly. Well, if you get those wrong, that's a law of physics. If you go too fast in a Type 1, too slow in a Type 2, or if you're a control freak and you control everything centralized, you're not going to move fast enough.

Or if you don't align compensation with the role, or if you don't drive goals down at the micro level as opposed to the centralized level, I think you violate a law of physics. I've learned painful lessons, and this won't sound too good, but it often comes down to "follow the money." It often comes down to the money. I'm not happy to say that. I wish the world were quite different. For example, when a vice president says, "My husband or my wife doesn't really want me to work so hard," I found that's all bullshit. That's a money conversation. And so that's another law of physics: follow the money trail. And the most important one for me over the years is align interests. And nobody aligns interests in business.

Let me explain to you what aligning interests is. You hire a vice president. He or she wants severance if it doesn't work. You know what the alignment of interest was? How about this, Mr. and Ms. Vice President: you come in, it doesn't work, and you give me all the money back I gave you. Or, investor, you raise a billion-dollar fund from your clients. Alignment of interest is: put all your net worth down, dollar-by-dollar. And I've learned in life, if you align interests—laws of physics—you never have to look. There's implicit trust in that. And so I have these little ground rules: we've got to align interests, we have to follow laws of physics, and most importantly, we've got to be crystal clear what we write

in pen, which is a principle, in ink, and when we write in pencil, which is strategy and tactics and so on.

This is great, and we'll bring it into a concept. Of course, one of the biggest transformations that's happening is AI. You described it that this might be a bigger transformation than the Industrial Revolution—steeper adoption curve, the cycle from hype to adoption is shortening. How should companies be thinking about that shift? Are the laws of physics changing, and is there a change for what you would look into as an investor? I

No, I don't think the laws of physics ever change. Once in a while, we learn you go from Newtonian physics to quantum physics. It gets broader, but I don't think you give up on Newtonian physics. If I drop this glass, it's going to break—9.8 meters per second acceleration. That's not going to change. But the world is changing. I wasn't as far back as semiconductors, but I was as far back as the era of the LAN, and the era of the LAN took five, six years to come around. I was around when Netscape went public in 1995, and we saw at least two great companies being built in 1997 called Amazon and Google, maybe in 1998. And then we saw the Valley of Death for many years. Then we came to mobile. Suddenly, from technology to reality, instead of being five years in the LAN, three years Internet, it became one or two years.

And I'm seeing that time shrink in AI because we're all interconnected. Once upon a time, when we helped build a company with founders, we'd have to be profitable in the US before we came to Europe. If you do that right now, you're dead. Venture capital, startup companies was this microcosm of the US economy, or maybe the British economy, or maybe the global economy. It is now a big part of the global economy. If you want to stay relevant, you have to be in technology and you've got to be in AI. So things are moving a lot faster because we're interconnected. And AI is the first time we run into a technology that can not only replace us, but be smarter than us. So we have no choice but to move as fast as heck, to invest before you've got clear data.

The good news is that the capital is there these days. And so as you build a company, you now know the limiter to your growth, if I can go there for a second. The limits to your growth are the capital you have, the size of your market, the unit economics you have in deploying go-to-market resources, and the founder capability to manage companies. And all the founders these days tend to be your age, 28, 27, how old are you?

31.

31, an old man. One day you'll be said like you were there for semiconductors. I hope someone says that with you. But it usually comes down to the last issue, the founder's ability to manage its explosive growth. And you have to run as fast as you can hitting the imprudence curve, which if you cross it, you do violate the laws of physics. But no longer can you relax. I'm sure, look, you've raised how many hundreds of millions at 11 billion right now? 500. $500 million. And so... The world changes. You go from Newtonian physics to quantum physics, but you still have to adhere to some basic laws of physics that says you cannot go past those boundaries.

Well, age isn't defining. I had the pleasure of speaking with Andrew Reid, who will be joining the board of 11 Ounces as part of this round. And he told me about this question, which, in your 50s, you took and had the courage to invest in NewBank, which is a very untraditional bet. It's a Brazilian credit card company, now, of course, one of the leading companies in the space. How did this happen? How did you decide to make that investment?

So I'm going to be brutally truthful with you. I have two engineering degrees. I know nothing about engineering. When they build a system at Sequoia, they call it the Design for Doug, DFD, meaning if Doug can figure it out, everybody else can figure it out. I'm not joking about this. I'm on a board of four cybersecurity companies. I know nothing about cybersecurity. I'm on the board of two financial services companies. One is worth about 80 billion, one 15 billion. Those are small numbers these days. I don't know much about financial services, but let me tell you what I do know a lot about. I know a lot about go-to-market. I know a lot about business. I know a lot about people. I know a lot about seeing around corners.

I know how to build a board. I know what the role of a board member with a young founder is: you're a shock absorber when they're too high. You hold them back when they're too low, sometimes support them. I know never to stress when times are tough because imagine the pressure that a young man feels when times are tough. Those are the things I know. So to me, repotting myself was no effort, was no problem. I had a great founder, a former Sequoia associate, and I had an idea for a Brazilian bank. He had no banking experience. He wasn't even a Brazilian, but he had a great idea. And we invested a million dollars for 15%, which these days is sacrilegious. Probably makes you twitch when you hear that.

And then we invested in every round up to 10 billion. And the sky's the limit. And so I don't want to get caught up in the product and technology. I believe that's the domain of the founders. Zero to one is black magic. If venture guys are smart enough to do zero to one, they would do zero to one. What we do, the good ones anyway, help you go from, once you go from zero to one to build a business around it, who do you plug in at which stage? And believe it or not, the answer is often the opposite of conventional wisdom. And that's what we do. And I think at Sequoia Capital, we're the very best in the world in doing that, which is why we have the most IPOs and so on. It's not because we invest in anything.

Because we don't. It's because we have learned over 53 years, we have that generational knowledge of what it's like to build a business.

So let's move there. So many of us here want to create an enduring company. We want to make the 11 billion be, of course, a good investment for Sequoia and build a generational impact, transform how we interact with technology. And let's shift to what it takes to get there. What do you think are the qualities that will differentiate the companies building today in this period to succeed?

I'll start with the founder. To me, the founder is the core of the company. It's both the heart and the soul. When you lose the founder, you lose a lot. Now, it doesn't mean the founder has to be the CEO. In B2B, it's a tougher company to run and you see a number of founders not running B2B. A lot more founders seem to run these B2C companies. B2C companies are easy to run, but the founder should control product because that's the soul of the company. So first one, it starts with that. And that founder has to be not only an outlier, tremendous outlier, but he or she has to have tremendous grit. Just never giving up. Sometimes like never giving up to a fault. When the market has spoken 15 times, we should give up, go do something else.

But we prefer the founder doesn't give up. And then in B2B, you want to get to market as fast as possible to get the customer interaction with, if you will, the thinnest utility that you can build, the simplistic thing that you can build. Aim probably not at the high end, aim somewhere in the mid-market because it's easy to go up, it's impossible to come down. And you want that two-way feedback. In B2C, which tends to explode and be in the hands of a million users, I don't think you want something too buggy because you might develop a bad reputation. So just understanding those trade-offs. And then look, simple things like, what does your first VP of sales look like? You're a young company, a great VP of sales, one, will wait you out, two, sometimes those guys are suits, or those girls are suits, meaning they don't know what it's like to go get the first 20 customers.

I can't tell you how many people we've hired over the years that could sell $20 million a year for Cisco, Google, and they can't sell $300,000 for, for a startup. And so plugging in the right people, knowing how to scale, how do you go fast but not too fast? What is the sales productivity model? How much sales over-assignment? You probably, a lot of you probably don't even know what I'm talking about. Those are the non-black magic things that we can help you do. At the end of the day, building a company is putting one foot in front of the other. I've said strategy is later. Right now, execution, execution, execution, execution. You know what a great strategy is? Get to 500 customers. That's what a great strategy is.

And then we can come over the top in marketing. Early on, all marketing needs to do is get you leads. Leads, leads, leads. Sell, sell, sell. Once you get to 500 customers, we'll talk about the overlay, coverage, you know, the little tighter type of positioning, the Super Bowl ads, and all that stuff, and

The, the, the team and especially the people is probably one of the things that we are the most proud of that define the culture and now enable us to scale in the way that, that we can. You mentioned, of course, the valuation changing so heavily in the private markets. You mentioned the numbers that could make me twitch. I wonder if they make you twitch, and are we in an AI bubble, and—

You know, I tell founders, because I've earned the right to a sense of humor, founders will ask me, 'So tell me, how much of a company, like, would you like to own?' I usually tell them, 'Well, usually not more than 100%.' And you should see, you know, how they lose their minds when I say that. But they know I'm kidding. The trend line is incredibly positive, but there are bubbles within that. And not every company—there's usually, in every year, there's a few thousand companies, but it's only about 10 companies that drive all the returns. And you've got to be in those tens. And there's some venture firms that come in during the early stages of the market and they invest in everything. And that actually pays off for them.

And there's some venture firms, nameless as they will be, they come off the tail end of a market, like in SaaS, and they invest in everything and they lose their shirt. I think right now it's lean-in time, but not in everything. Not every company is going to be worth a trillion dollars. So I think you've got to pick your spots. We are in a bubble, but history shows that if you pick the right companies, you'll be rewarded even if you pay the higher price. And maybe you'll be out of the money for one or two years, but you'll do just fine. And so it's all a matter of picking them. And so it's a pick 'em business. AI hasn't quite figured out how to pick them, thank God, but it's a pick 'em business.

Well, let's shift now to a little bit of an informal conversation some of the questions I would love to ask you if it was effectively behind behind in the room behind the cameras We are of course thinking about the future as 11 labs are thinking about hopefully building the generational company and IPO in one day the private markets are Where they are what in your mind? Company should be thinking about when they make this decision between staying private or going public. I

Let me take it one step before then. I believe nature hates a vacuum, especially when we're all interconnected. If you don't go get it, somebody else will. So when I see an operating plan for next year, 'We're going to do 732 million,' I ask them, 'Why is that the number? What are the limiting factors to that growth rate? Why not 832? Why not 632?' And my metaphor is of a river with rocks in the river, and his job and the board's job is to remove all those rocks. And so you've got to go towards maximum growth, subject to a payback level you want to live with, subject to your cash, subject to a lot of things. I sometimes draw a line: no more than two-year payback, because then you're way out there, you burn too much cash, you're out of control.

And so you've got to hit that growth rate, and the public markets will reward you for growth. Even when there's a little bit of hiccups, suddenly they want value. Bullshit. Don't fall for that trap. Go get the business. Second lesson is, even when there are bumps, don't give up on R&D. In other words, continue to invest in R&D. That for me was a lesson in '08 during the bump. We cut back sales, we cut back marketing. We were smart enough not to cut back in R&D. Maybe we slowed it a hair, but you're building that core. And so you've got to put those in place. The other thing, which is somewhat sacrilegious, and I will tell you: make the company a little uglier before you go public so your metrics can improve.

The issue with that, though, is are you going to develop, are you going to inculcate ugliness into the business that you can't remove? And so you have to figure out what you can make uglier. Maybe you hire a few too many salespeople early on, you get there for their growth, but not so much that you develop all these bad habits. And so that's a fine line. And the other thing, you've got to have a predictable sales model. You have to have a board plan. This is the way I would do it. I would have a board plan that's X, and I would have an internal plan that's X plus 0.2. And can you meet the extended plan with the board plan headcount? And when you start meeting those numbers, you know you're ready to go public, and you should start planning—which I know you're going to ask me next because I saw some of the questions. You ought to—you ought to start planning for this 18 months before because you've got to, by law, you've got to hire all these people on the board, you have to have audit committee members. You don't want to hire them all in the last week.

Keep in mind that most board members—and now this is going to shock you, and it's not a kind line—most board members are no-ops. You're lucky if you get a no-op board member. They do no damage. They add no value. Zero. You think I'm joking. I am not joking. If you get one or two good board members, usually in the domain that's relevant to you. Like, for example, you came from tech, right? So if I were on your board—and I'm not on your board, and I don't know who's on your board—I want to put a CEO on a board that's built a business from whatever your run rate is to five times your run rate. Someone who you can go have lunch and dinner with. You probably don't know much about go-to-market. How could you?

You came from product. I'd want to go get maybe a board member that grew in go-to-market to complement you. So those are the people we want to surround these fragile geniuses called founders, because they'll communicate with the operating people a lot more; they'll communicate with us, the venture folks. So even though after a year, after six to nine months, they start to trust us and so on. And so you want to plan about 18 months before. And then when should you go public, whether you should go public—to me, going public is a must because it's an implied contract you have with the investors and with the employees. So at some point, you want to go public. Second, you don't want to go public too early.

Third, you've got to have a repeatable sales model. And what is the IPO for you? Is it a financing event? No, there's money all over the place. You know what it is? It's a branding event. When you start getting large customers and you want to get a customer to pay $25 million a year—and you'll get there one day—they want to know they're not the only schmucks paying $25 million a year. They want to know that you're a real company. So for a B2B-ish company—and you're a B2B-ish company—going public is the branding event. It's a statement to the market that we've arrived. Going public is also a real pain in the ass. And so you have to make sure you have a CFO whose job really is to play defense when you're out there slaughtering lions and tigers, because that's what you're going to be doing.

And so, when you have all that in place, it's time.

Doug, was there an IPO that left a lasting impression on you?

I've learned a lot from a lot of IPOs. I think I was screwed more—well, it wasn't me, it was the board I was on, and got screwed more in an IPO than anybody in history, where the bankers at this IPO argued—we were in a fight whether the price should be 20 or $22 a share. The stock opened at 310. Think of all that money that now wasn't on a balance sheet of the company, but it's on a balance—it was in a pocket of the investors. They were offered shares of $22 a share and rode it to $310. That left a mark on me. You should see me on these pricing calls. I am the bank's worst nightmare. Now, not every IPO is like that. I won't mention names. There's IPOs. I look at the book. I look who's buying. Maybe it's 10 times oversubscribed.

But I don't like the looks of it. Maybe we go with the price. But usually, I put the price up because that's in the interest of the company. So to me, it's the pricing calls. Talking of Nubank, we were the last company to go public in whatever it was, 2021. And if we didn't go public, we might not have a company. Because there, it was a financing event. It was a bank. So that left a lasting impression. Sometimes luck helps. But, you know, there's all of them. To me, the interesting thing are the pricing calls. You'd be amused if you heard the back and forth. It's entertaining to say the least.

Don't worry, we're not putting the prices up at 11 Labs.

You could invite me on your pricing call. I'm happy to come.

Thank you. What's the actual conversation that you wish or you think should happen earlier in those board conversations than it really does?

So think about this: in the early days, it's—it's not a strategic conversation. It's a functional conversation. We have a young CEO, young VPs. As I said, you can't get an experienced VP of sales. You may have a VP of product management co-founder. You have a director of marketing that, when you hire them, they want the VP title, blah, blah, blah. So the conversations early on are all functional. You know, what's marketing doing? What's sales doing? Should we hire a marketing person, that message, lead gen person? Those are the conversations. To me—I'm not going to answer your question—to me is, when do you start transitioning this conversation from zero strategy to 50% strategy, 70% strategy? When do we stop talking about the tactical issues, the one foot in front of the other?

That's the growth of the company and keeping an eye on that, because it's very easy once you start in tactical conversations to remain there for the next five years. And instead, I look for a time when we can start shifting the conversation. Like, for example, I talked about having the thin layer to start off with. You always want to start off there, but you want to end up with a platform. And you want to build your product in a concentric circle. First you have this little utility, then you go, and you go, and you go to get to the $25 million. And one day you want to be Amazon. You have a first pillar. What's the next pillar? Think of books, records, everything you can possibly buy, AWS. And so those are strategic conversations.

At some point, the conversation has to get there, but not in the first two or three years as you're trying to make these quotas.

Trying to build this management team and trying to get this engine going. Luckily, we have amazing investors on the board, like Jan Hammer and now Andrew, who are pushing us and, I think, help us hire some of the incredible talent as we think about that future. For founders building today—and we have a number of those in the room, but also builders in some of the established companies—what are some of the hardest truths they need to internalize if they want to build something that will last, and...

So, a few lessons, I noticed we're almost out of time. I would tell you to architect your cap table the same way you architect a product. Don't give this bullshit of, I got two term sheets. You know, oh, I met a firm, I got a term sheet. Who cares? It's like going to a bar and said, this girl, this guy talked to me, I'm going to get married. You know, it's irrelevant. architect it, look for certain skill sets, even from day one, make the decision. Do I want a seed investor who will not be there? I love seed investors. We have a seed funds, but when you're reaching scale you and you bump a little and you need 2 million to raise 20 or 30, or you need 5 million seed investors will have that. So figure out if you want to go with a seed investors, many good reasons to go with seed investors, or if you want a bigger firm early on.

So be very, very, very careful of how you architect the first few steps. All negotiations are lost in the first few steps. The other thing is if you have two or three co-founders, align the equity. You know how many times we're 90 days into a business and two founders want to take out founder three who doesn't do anything? Well, founder three now has a third of the company. And look how much you've wasted. And then when you hire an engineer, you're arguing over a tenth of a point. Have the conversation with your co-founders. 'Hey, you're a world-class architect, you're a world-class product marketing guy, you're a finance guy. It's not going to be a third, a third, a third.' Have that conversation because that will ensure stability.

If you are in la-la land, 'We all get the same, kumbaya,' all you're going to do is create a mess.

Doug, last question. If you were to start a company today, what would you build?

Let me tell you what I've told my daughter-in-law. Go figure out a problem you experience firsthand. Zappos couldn't find shoes. Well, there are PhD projects. Google, that was a PhD project. But oftentimes, you have a founder or a set of founders that have firsthand experience of the product. I can take you to Airbnb, Yahoo. Airbnb, they needed money. They laid some freaking air mattresses on the floor. They couldn't find a room. Go experience a problem. If you want to scare the shit out of me as an investor, tell me that you and two of your friends got in a conference room and wanted to start a company and decided to talk to five CIOs to figure out what their problem was. That is not what I want to hear.

Go experience a problem. I'm not answering your question, but I'm giving you the directional answer. I'd go figure out a problem that I have an inherent feel for, and I'd go that way.

Doug, don't leave just yet. This has been an absolute pleasure. If I can ask for a round of applause for Doug.