The Do's & Dont's of Company Building with Doug Leone, Global Managing Partner at Sequoia Capital

Well, thank you, everyone, for joining us today. My name is Pejman Nozad. I'm one of the partners at Pear VC. For those of you who don't know us, we are an early-stage fund in Silicon Valley. We aspire to be the best partner for entrepreneurs going from zero to one stage. Our investment team have started and sold eight companies, so we have been in your shoes eight times. And our notable investments are DoorDash, Gusto, Guardant Health, Branch, Aurora Solar, and many others. But more importantly, we have a special guest today, my friend for over 20 years and my mentor, Doug Leone, global CEO of Sequoia Capital. So Doug, welcome and thank you so much for being here today. I know how busy you are.

This means a lot to us.

Well, thank you for having me someone in the chat let me know there from the other side of the globe where it's 1203 in the morning, so thank you to all of you are listening and mostly to those of you, especially to those of you who are in a wee hour of the night where it's not lunchtime it's it's.

I have so many questions, but you know, we were talking about it last week. We saw the announcement of Airbnb and DoorDash going public, and the day before they announced it... Is this becoming a habit at your office, that every big IPO, there is Sequoia there? And I'm going to ask more about that.

Well, it's not a habit. If you say a habit, then you're taking the wrong attitude. I will say that we've had over 300 IPOs, $7 trillion in market cap, and we calculated it just yesterday, 27% of the NASDAQ is made up of Sequoia-backed companies. So we've had some success. But keep in mind that all these companies require 10 to 15 years' worth of work. I think we've been investors in Airbnb for 13 years. So to call it a habit would do a disservice. But it's something that's happened before. It's something we don't really celebrate because, in our minds, we've been working at this for years and the IPO is not an exit. For us, the IPO is just another day in the life of the company. And if we do our jobs right, we probably want to hold Airbnb and DoorDash shares for the next 10 years.

And for those of you founders, I want to tell you, there's always a tendency to sell early. And once you get the flywheel going, the real money is made, the real return. It's a lot tougher to go from zero to $100 million in revenue than from $2 billion to $4 billion in revenue, even though you're adding $2 billion in revenue. And so for us, when we get a chance to find great founders in great markets, we plan on being shareholders for 20, 25 years. So it's not a habit, but it's not the first time. Let's just say that.

Yes, I'm pretty sure that was it. So by the way, we actually, speaking of your $7 trillion market cap, we have a promotional presentation before these talks that talks about the combined value of our companies. I said, "I'm not going to do it before Doug," because whatever number I say, compared to $7 trillion, nobody can match. So I just want to put it out there.

Well, it's pretty easy if you have Apple. If you have Apple, that's $2 trillion right there.

I have a lot of questions about Sequoia, but I think before that, what always struck me is your background as an immigrant. You came to America on a boat when you were 11 years old. Can you talk to our audience about how those days and those years, and even when you got your first job, shaped who you are today?

Look, there's two or three ways. Sometimes you come here because your IQ is 150 and you self-select. That is one reason. And then it shapes you that you self-selected out of wherever you came. It could be you came from humble beginnings. And you come here and, boy, you appreciate everything that's America, as imperfect as it is. What an opportunity. You and I were just talking about the ability to move town. You don't like San Francisco, you can move to another town. People don't understand that you cannot do that in most places in the world. So that's another vector. But then there's one vector not often talked about, and that is the ability to look at a problem from different ways—if you will, my Italian brain and my American brain.

If you come here during your formative years, you are forced to shift your mindset on things. And I think that gives you a great advantage when you look at the world, when you look at situations. So hunger, self-selection, and a trained mind to be a little less hardwired than it might otherwise be are the three ways in which I was shaped. I will tell you, in my case, it wasn't because I had an IQ of 140. I just want to get that out for the record. We just emigrated because we were poor. It was no more complicated than that. I was an only child. We lived in a studio apartment with my mom and dad. And, you know, if you want to talk about privilege, I think the greatest one you could have is parental love privilege. If you have that, you got a hell of a head start in life, uh, and I had that. I didn't have a lot of anything else, but I had that, uh, and then, you know, you look around and you say, 'I don't want the next 40 years of my life to be like the first 10 years from a financial standpoint,' and that's a driver that doesn't finish.

The last thing I'd say on this, I had a tough high school. And I've talked about this in the past. I didn't have a pleasant high school time. I was made fun of as I was an immigrant. I was an immigrant who couldn't speak English. And that created a bit of an edge. So think of this warm-hearted only child with this pissed-off teenage years, and I still have that. So, you know, I'm now 63 years old, I still think about those days. The edge doesn't go away. I don't think experiences like that ever go away, and all those can be either negatives or competitive advantages, and it's what you make of them as an individual. And, and you have a choice. We all have a choice what to do with our background, and I think one of the greatest opportunities in life is to turn negatives into positives. You learn how to do that in life, boy, you have a great advantage over everybody else. Well, great perspective, um, and I know after that, you, you attend, you went to Cornell and then Columbia and MIT, moved to Silicon Valley, worked for Sun Microsystems, and joined Sequoia. I just want to do all the way fast forward till today and get your opinion as a leader of this organization.

Why Sequoia has been on top of its game for many decades?

So we're about to enter our 49th year. And that seemed like a long time a few years back, but it's not a long time. I would attribute it to a number of things. First of all, culture. I used to think culture was this thing only older people that have nothing else to say talk about. And in reality, culture is the invisible hand that causes people to do things. It is the pull, not the push. And our culture is to find people who are hungry, of modest means, of something to prove, and teach them the 'we' pronoun. But in order to teach them the 'we' pronoun, you have to pay in the 'we' pronoun way. To say, 'We've got a great culture where we,' and you have a head guy that makes 80% of the compensation or 50% of the compensation, that doesn't work.

So you have to have the right culture that leads to the right people, wrap it around with the right compensation, and always talk about it. Always be willing to discuss it, to build a trusting environment. Why is it that we have these quirky individual contributors, whether the name Roelof Botha, Neil Shen, Alfred Lin? Why is it that they stay with us? We're together because we foster a circle of trust. It's OK to be wrong. It's not about being right. It's about finding the truth. It doesn't have to be your truth or somebody else's truth, it's the truth. So we foster an atmosphere of trust, we pay correctly, and we have a culture where I have—where we have 10 tenets. Number one is performance, number two is teamwork, but if you're missing one, the other nine don't matter. And so, the right culture, the right people, the right payment, and trust would be why we have continued to excel. The other thing, and the last thing I'd say, is you've got to act as if you've done nothing, because the greatest threat to someone like us

is the fact that everybody wants to take us down, if only for the fun of it. Not because they don't like us, because what else do you want to do? You want to take the person on top, the firm on top. So we only have one place to go, and that's down. And so we do crazy things. We have sessions on a regular basis that say, 'How do we put ourselves out of business before somebody else does?' What would we do if we were a new firm, if we were Pear VC, and we wanted to take Sequoia down? What would we do? And we go do it ourselves, meaning we'll take apart things that are working because we know they may be working for now, but they're fragile for the long term. And so that is the mindset that we have.

That's why we don't celebrate the filing of two IPOs last week, because that's irrelevant. That's work that was done 10 years ago. We're very much focused on the founder we're going to meet this afternoon.

Well, I think this is very impressive. Actually, one of my partners brought this question in regards to Sequoia Capital. It just—it seems you get people who, the majority of them are not from an investment background, or maybe, but you turn them into amazing investors, including Alfred Lin or Roelof Botha. How do you do it? Is it a special place? Everybody does the same thing, or you have a training playbook? How do you train these amazing investors who come, not only stay with you for decades, but they become exceptional? You just mentioned that Alfred Lin has two IPOs coming in December, and he's on the board of DoorDash and Airbnb.

First of all, we need to appreciate that the way we are, the principles are in pen, but we do not have a manual. And the reason for that, I really want us to be a living, breathing thing that changes through time. It has to because the world is changing at a faster and faster rate. So when you say 'train,' careful, because 'train' almost dictates 'manual.' We do not do that. And there are no rules, because I can tell you right now that we love people with product management backgrounds in venture, for example. But then look at Doug Leone. He was a sales rep. Look at Roelof Botha. He was the CFO of PayPal. Or Alfred Lin was the president of Zappos. Or Mike Moritz. He was a reporter. Go figure. And so what we look for is people that can appreciate not only the technology out, but from the customer in.

And we are very big in letting people learn by osmosis. Uh, and we have let people struggle on purpose. I, I, I call that walk through the abyss, where they may be lost for one or two years, and we purposely don't help them. And we do that for a reason, not because we're mean, but because we know they're gonna come out of it. We have a high confidence. But if they pull themselves out of it, boy, they're gonna be incredible. Uh, and I went through the abyss, for example. And so we try to blend our teams with operating people along the dimensions that we think matters, which are engineering, product management, product marketing, and revenue. That's where the core of the company is. And sometimes we surround them with a couple investors, but it's a combination of those two: teaching operating people how to invest, teaching investors how to be operating people, and then watch the music happen.

Always bring somebody new that's willing to teach us something, but no rules, no hard training programs.

I want to shift from Sequoia to entrepreneurs, and this might be an obvious question, but I want to hear from you and the audience hear from you. How do you help entrepreneurs? How does Sequoia help entrepreneurs?

So there are many, many, many ways. So the typical entrepreneur is an engineering minded person. They know how to build products. So the very first thing we help them is with product management. We make sure that within the idea, there's a product around it. And we have people in the building that can do that. then as the company builds a product we spend a lot of time in what i've actually named the merchandising cycle you've never heard that because i gave it a name i finally decided to call something and that is from product marketing to demand gen 2 revenue and i focus a lot about that because wherever that's broken it looks like you got a bad salesperson You have to remove the VP of sales.

It could be, you know, you've talked to the VP of sales, they'll tell you, 'Not enough leads,' or she'll tell you, like, 'We don't have enough leads.' Well, I know to fix that: go to the demand gen person, invest a little more. You have that conversation, you find out, well, it's not really the leads, it's the messaging, it's not resonating. Whoa, we have to go back to product marketing, the top of funnel, the messaging. Sometimes it's the wrong product—product management. Sometimes the product is not working—engineering. Sometimes the vision is wrong—oh my God, we have to quickly do a change. But you don't know that unless you're willing to debug that. And we work very hard at debugging that with the founder.

And then we have other services like, you know, we'll help you find the first few customers, we'll help you recruit executives, the first few engineers. We don't want to recruit 50 engineers. We want to help you recruit the first five or seven A-plus engineers because then the flywheel is going. We don't want to help you get 200 customers, but we want to help you get the first five or 10 because it's your core competency. Lately, we've added another function, which is the design function. Most founders, if you give them 30 minutes, they can tell you what the product does. But if they have to say it in three words, can't say it. So we've decided that in order to get the messaging right, it would be helpful to go from 30 minutes to 30 seconds to three seconds.

And getting that right, because that, that leads the thinking of, 'We want to be the company that's known for X, and X has to be a three-second exercise, not a 30-minute exercise.' So we, we help out all these strategic points to debug the system to get to the point of maximum healthy growth, which we think, in a rapidly changing world, is a strategic imperative. And I want to make sure you hear those two words: it is not an option, it is a strategic imperative, not only to survive—not only to excel, but to survive. And so our world is to remove these bottlenecks to help the founders get to that level. And we have, you know, 49 years of experience. We always have the tension between what we know and what we don't know because it's a new world.

And we're always very careful to blend those two—you know, what we've known through lots of experience, but whoa, whoa, whoa, it's a new problem—which is why we prefer to deal with investors and founders and executives who have first-principle thinking. Meaning you may have experience, but you're going to break that problem down to its core and you're going to apply your experience, not have the answer before you know the question. We're very, very big on that.

Well, thank you for sharing that. Speaking of entrepreneurs, when you look at your career or what you have seen at Sequoia last few decades, is there any common characteristics among the best founders you and Sequoia have ever worked with? And can you share those, even few, with our audience?

Take all the terrible adjectives that people throw at you founders: irreverent, don't listen, thick. You can apply those to our best founders. And by the way, while you're at it, you can apply them to us at Sequoia because we are like you. We hire people that are like you. And so they have very clear thoughts. We love founders who have firsthand knowledge of the pain. For whatever reason they've experienced the pain, either working for a customer, working for a vendor—there's so many types of example. In Nubank, David Vélez couldn't get a credit card without waiting in line. In Airbnb, they needed money they didn't have, so they rented out a room. And their history through tech, there are many histories.

Cisco Systems, they needed to, to connect the departments at Stanford with technology. That's how the router was created. Take it further back, Sun Microsystems, Andy Bechtolsheim wanted to build a new type of computer for himself so he can do engineering work on it. The Yahoos couldn't find anything online. Blah, blah, blah. So we like founders who have experience with the problem. Now, there are always exceptions. eBay was a masterminded business plan. People got together and they decided to start a company. But we get kind of nervous when we meet two or three people that said, 'We wanted to start a company. We got in a room and we started thinking, "Where are the problems of the world where we should go look?"' And we talk to customers, because customers don't really know

two steps away. Customers only know what's right in front of them. As Jobs used to say, no customer would have ever said that he needed an iPod or an iPhone. And so we like people with an inherent understanding of the problem who can articulate the problem. If you can articulate the problem, we almost don't even have to hear about your solution because we know what the solution is.

And speaking of that, and you know, the talk of town is always, is product-market fit. And I was reading on your background, and you talked about Meraki, the company you got involved in. Correct me if I'm wrong, Cisco bought it for a billion dollars? Billion-two. Billion-two. And what you mentioned was that this was a brilliant team, great product for the wrong market, and you spent the first two years really figuring out what market to go after. Can you elaborate a little bit more on how often this happens or what suggestion you have on entrepreneurs in that same situation?

So I want to give you the spectrum first. I used to go to NASA. I used to see something that vibrates 22 million times a second. And he says, 'Look how great this is.' And I wouldn't touch that. In other words, that is one side of the spectrum. On the other side of the spectrum is something that is total product-market fit. When Meraki was someplace in the middle, they were dealing in the early days of Wi-Fi. We knew Wi-Fi was going to be an interesting space. And so it was already in the space we thought we could navigate. But their model was to go to apartment owners and provide Wi-Fi to their renters free of charge so they could differentiate their apartment from other apartment owners. And when we made the investment, we said—and they had a working product with a seed investment, MIT-type of technology, terrific founders, world-class founders.

And so we said to them, 'We'd like to be a partner, but I can tell you that the apartment thing is not—that ain't the plan.' And so we spent a year and a half trying new things. And they, not we, they found the market that they care. And if you talk to the founders of Meraki, and you ask them what was Sequoia's value-add, you might get an answer like, 'They left us alone. They applied no pressure. They let us create.' I can tell you there were the genius board members, who I will not mention right now, who said, 'Let's take those guys out.' I'm thinking, 'What, you fire the founders? You know, like, what are we left with, the VP of production?' So I knew the only chance we had was to work with them. I know that Jim Getz and I, my partner, we met with them on a weekly basis just to talk about products and markets.

And that lasts for about six, nine months. We talked about a lot of ideas. They went away, they created, they tried a few things, and we found the market that worked. And I would give the founder 90% of the credit. We helped, for sure, but 90% of the credit, just leaving them alone. Once in a while, doing nothing. And recognizing talent and letting them run is the best thing that you can do.

Fascinating. Actually, Michael has a question here that might be related to this. He says, 'Doug, in your interview at Stanford, you said you have the ability to view a business from the customer-in versus from the product-out. Can you elaborate more, and how do you do this?'

So I grew up in sales, meaning I have two engineering degrees, but I'm not an engineer. The most I can do is fix things around the house. I have a wife who thinks I'm handy, but that's as good as it gets. Uh, but from the sales perspective, I always understood the customer and what the customer needs. Now I would not let the customer product-manage, as I said, but on the other hand, if you come up with an idea, I'm not fascinated by the technology, how many times that thing vibrates. I'm not fascinated by that. Actually, I don't really care. I try to think about it. What pain does the customer have that this can solve? Is this a customer with budget? Is this a product where the vendor's PhD has to be smarter than the customer's PhD, which means it's a long sales cycle?

Is this a top-down sale, where a 100k PO turns into a 3 million PO, which means that PO is not going to come in my lifetime or yours? Or is this one of these things that can eat the world from the inside out? Those are the things I think about from the customer standpoint. The fact it's great technology is a given. But that doesn't make me want to write the check. What makes me write the check is things from the customer standpoint. Like I said, no hard rules. Once in a while, there's a Meraki. Meraki, great founders, working product, a product at MIT called Roofnet. And we knew Wi-Fi was going to be a huge market, but we hadn't quite figured out how to play it. But most of the time, when I think of a business plan, I try to stay away from the muck.

The muck is something that requires a long sales cycle where you're selling to engineers and you've got to prove to them beyond a shadow of a doubt with two PhDs that the product works. I try to stay away from those investments.

Obviously, every founder would like to come and pitch to Sequoia Capital and partners. What are the common mistakes you have seen when people come and pitch to Sequoia Capital?

Well, first of all, they don't come early enough. We have a seed business: Nubank, one employee; Airbnb seed; Stripe seed. I can come up with a whole bunch more if I thought about them just for a second. So why do we want to be there early? We want to help you shape the company. All these founders take all these SAFEs, and they don't realize that all those SAFEs, when you blend in pro rata rights, pro rata rights are the right to invest more in a Series A. And I'll tell you what, if Sequoia invests, everybody will want to invest more. We see so many companies, but after Series A, these poor founders have lost half their company. It just breaks our heart. So think about architecting your company the same way you architect your product.

Go to seed investors if you want. Pear are terrific seed investors. Reward them with ownership for having taken a shot early. Come to us for seed investments. But be careful of raising what appears to be these gifts of capital that is the most expensive equity you will ever raise. Keep in mind that the moment you have us in your cap table, within a month, you're going to get term sheets from people that want to preempt you simply because they think we know something. We've had companies that are struggling being preempted, and so be very careful with your shares. Save your shares for engineers, for long-term partners like Pear, like Sequoia, and be careful of all this free angel money. So that would be one issue. Second issue: be very clear in what your roles are and split equity accordingly. It's always Kumbaya in your early days.

Jimmy, Susan, and I are splitting 33 points each of the company. We're all equal. Well, you're going to find out within 90 days that you're not all equal. One of you carries a huge load and it's going to destroy your relationship among the co-founding team. Figure out early on who does what. Leave ego aside. Split the equity correctly, because that will ensure longevity, not destroy the longevity. And don't come in with the titles of CEO, President, COO. Recognize that what you need is a leader of the band, someone to get the product out of engineering, someone with product management type of mindset. That is a great founding team. And the last mistake is raising too much money. We want to raise a 20 million Series A.

We never want to worry about raising capital for the next three years. Why would you do that? What you want to do is raise as little as you can to get you to your next big milestone with a little bit of cushion in case you miss by a quarter or two, because your valuation is going to skyrocket after that. Why you'd ever raise a big round in the early days is beyond me. It is just nuts. You got to defend those shares. Later on, you'll be arguing for half a point here and there of ownership, where now you're willing to give 30 points of ownership as if it's nothing, as if it's candy. And so I would think about those first steps in the same way you think about your product, the same exact mindset.

You architect your product. You want to architect your investors and your company.

Well, I believe one of the misconception in Silicon Valley among founders is that they think bunch of rich people give money to Sequoia and even pair and we make them richer. But one of the astonishing things I notice when I come to Sequoia office is every single conference room is named after a nonprofit organization. Can you talk about that and your philosophy of getting your investors more nonprofit foundation?

We do not have a family office. We do not have a rich family as our client. We are not in the business of making rich people richer. I want to make that crystal clear. 70% of our clients, our limited partners, our investors, are nonprofits. The other 30% are pensioners, people that have worked their whole life, so we want to secure a retirement. And then we have some sovereign wealth funds. Why do we have governments? And the reason for it is we have built Sequoia to stay with you, the founders, for the next 20 years. So we have a seed fund. We have a venture fund. We have a growth fund. We have an $8 billion fund for the latest stage. We have a public market fund to ride with you for a long time.

And we do that in the US, we do that in Europe, we do it in Asia—in China, we do it in India and Southeast Asia. So we can take you globally and we can stay with you forever, and we have all these services I talked about earlier. That requires a lot of capital. We cannot get there with endowments and foundations only. There's just not enough of them. There are schools, some of you have gone to, where 8% of the endowment is Sequoia Capital, which is crazy. I tell the chief investment officer, 'Are you out of your mind putting 8% in Sequoia Capital?' They said, 'It's the best investment that we could have ever made,' which is great. But I could not have gone to Cornell if it wasn't for a scholarship.

I didn't have any money. And I want to return the favor to other kids, which is why we are mission-driven first. We take this very seriously. On one side, we have the nonprofits. On the other side, we have you, the founders. And we're in the middle. And think how privileged that position is for us. And if you don't think we take that extremely seriously, you don't know us. Founders are the head of the dog. They come first. Without you, the clients won't come. Founders are first, limited partners are second, we are third. Not because we're babes in the woods, but because we know if we do right by the founders and we do right by the clients, we'll do right by ourselves over the long term. And that's how we run Sequoia Capital.

So you have been for decades in India and China, been very successful, and recently opened an office in Europe. What triggered that?

So we went into China in 2005 and India in 2006. Why did we do that? We have the simple goal of being the largest outside shareholder—not shareholder, founders—large outside shareholders in the most valuable companies in the world. That is our goal. In order to do that, you have to go into the economies that are not only large, but growing. That took us to China, Southeast Asia, India. And I'm a European. I grew up in Europe. And I went looking in Europe in 2005. It wasn't growing very fast. 2010, again. But over the last two or three years, we started to notice that important market leaders are coming out of Europe. We are investors in four companies in Europe whose market value is over $10 billion.

UiPath, Unity, Klarna, and I can't remember what the last one is. And so we've noticed more market leaders, we do not care to be involved in a company goes public at a billion dollars. That's not as unless it is a chance to being a very valuable long term company. As I said, the IPO is just a one day, we really don't care. And what happens on that day, but more and more market leaders are coming out of Europe. We decided to go to Europe now with a separate fund like we did in India and China there. Those companies tend to stay local, but with the same fund as the US because all European companies come to the US first, all US companies want to go to Europe. So we don't want conflicting investments.

So we are in the process of moving all our services—I mentioned the recruiting and otherwise—to Europe as well. Full-fledged, we now have a team of three or four. I spend a week a month in Europe, but it has to do with the market leaders that we see coming out of Europe. If we want to be invested in them, we had to go to Europe. It's not pleasant. It's a heterogeneous economy, different languages. It's not an easy place to go. You're always on planes, but you have to do it if you want to be partnering with the best companies.

And, Doug, the model is the same thing, starting from early seed all the way to growth.

We hired a lady from Accel who was both venture and growth. We hired a young man from Revolut, which is a financial services company, a new fintech company. He was a product management person there. You're starting to see the blend of investing and operating. He's going to lean a little towards venture. We're looking for a third person. We're close to making an offer to someone that's a little more growth. And so we're going to span the gamut in Europe as well. We hired our first recruiter, talent, for our companies. We have office space and we're off to the races.

I'm reading a question from Srishti, asking, "What are some of the most exciting innovations you're seeing these days, especially with the pandemic, Sequoia might back, or any sector?"

what in my mind just leaving aside the companies that just got a rocket behind them due to the pandemic such as zoom we're lucky enough to be investors in zoo uh and there's a number of them to me it what the pandemic has done it has forced the hands of many u.s corporation to invest more in technology than they had before they have a decentralized workforce so it's not about zoom is maybe the security aspects are not working from home so companies have had their hands forced in spending more on technology that is really the benefit of the pandemic uh uh and so we're seeing immense types of budgets we're seeing the whole uh thing of of data you know starting with snowflakes which i think is probably the killer app of the cloud and how do you get data in how do you put data out what do you do with that data how do you turn that data into business where does ml fit into that boy all that is creating so much confusion that we love through confusion there's opportunity and so to me the whole re-architecting of the enterprise that's happening

...ongoing, constantly, in real time, is another fascinating opportunity. And we have learned that these little products that almost look like utilities, they get a toe in in these corporations, tend to expand through time. And so we've learned to keep an eye out for these—for these things that maybe sell for 20k, 30k, that they look like a point security product or something like that, that—that—that spread over time. We have seen that more and more in the last two years than we've ever had before.

Great. Okay, I'm going to switch to your daily routine. I know you wake up 5 a.m. every morning. What is a daily routine and why are you waking up 5 a.m. every day?

Doug Leone - Well, I think the why is more important. So, I am 63 years old and I'll be darned if, when I step back from the leadership of Sequoia and, by the way, I'm not the CEO of Sequoia, I'm a partner. I don't get paid any more than other senior partners. Doug Leone - I just take care of—I just make sure we all roll one way, so I don't want to overstate my importance because it's really not there. Doug Leone - But I'll be darned if I'm going to be the person that people said, 'He stuck around for too long, didn't carry his weight.' I am, believe it or not, I'm paranoid. I'm paranoid that I want to remain highly productive. You know, there's a saying in America, 'I want to leave it all on the field.' Uh, yeah, I do want to leave it all on the field. I want to make sure there's nothing left when I'm done. I think it's going to give me great inner peace. And so, in order to do that, in order to perform at that level—for me, anyway, not for everybody—it has to be

all throughout. It has to be mind and body. And so I work very hard at staying in shape. I have a terrific family, four children that all live in California. How lucky is that? They all live in the Bay Area. A lot of parents are not blessed with that gift. I am. Grandchildren, and Sequoia. And so I don't have a lot of outside interests. I picked up golf during COVID because that's the only safe thing that you can do. I completely stink at golf, but I have a little new thing. But I want to make sure I am at the razor tip-top of sharpness and staying in shape, and weightlifting two hours on Monday and two hours on Tuesday and be done by Tuesday, and then doing cardio and stretching and pushing and pushing and pushing so I can stay, if you will, young in front of you, the important founders, is what I really work hard at. Uh, I want to stay fresh, I want to stay crisp, and then one day I'll just get out of the way. But I'll tell you,

until I'm done with Sequoia, I'm going to be hungry as can be, and I'll try to be as helpful to founders as I can be.

I personally respect that a lot, and I always learn from you when you say these words. This is another question: what career advice do you give to your children, Doug?

Well, I think you have to understand the kids. There are some people that do better in what I call parallel tracks. I'm going to be a consultant. I'm going to be a management consultant, and that's all I'm going to do. And you're going to have a great life being a consultant. There are people that want more chaos, want more risk. Uh, and so you have to understand the kid. Clearly, the—the—the person I don't want my kid to be, I don't want them to be the management consultant who thinks they should have always taken the shot. Conversely, I don't want them to take shots when their mindset isn't the same. The other vector I think about is, there are kids, I know early on what they want to do. I want to be a programmer from the age of five.

There are some of those kids. Or, 'I want to be a pianist from the age of seven.' But most people aren't like that. And I told my kids, 'Create options, don't remove options until about 25, 26, 27, and then remove options.' Because keeping too many options open means you're not focusing on anything. So, experience and then narrow. And so that was—I don't have any children that wanted to be a pianist nor a programmer from the age of five. I think they all had an appetite for risk, and I understood that, and I tell them, 'Take shots. Take the shots.' I have a son right now who is a VP of sales at a company. He's talking to another company with eight employees. He said, 'Boy, they want me to go as a rep.' I said, 'Who cares?'

Who cares? You're going to be the first person there. You're 33 years old. If you're as good as you are, you'll be VP of sales by 35 there as well. Take the shot.

Well, maybe, maybe this is a good place to tell the story of how you got your first job and you heard that you start from the bottom, and when you got the job and you said, 'OK, I've already made it, I'm in business.' I love that.

No, it's a true story. On day one, I was 15 years old, working for a small business. And the owner, a little tight, but I loved him, told me to go clean the toilets. And I went to toilets with the biggest smile on my face, because you read your whole life, you start cleaning toilets. And I said, 'It's true.' And I thought, as I was cleaning those toilets, 'You son of a—not him, but you, the whole world—I now got you. I got you because you let me in. Now you have to deal with Doug Leone for the rest of your life.' And so I had the biggest grin. Now, I wouldn't want to clean—I cleaned toilets for a summer, basically. I can't tell you that by the fifth time I had that big smile on my face, but that first day, I had a big smile on my face. Well, I love that. I don't know, you have anything else to share? Um, um, Doug, this was an amazing conversation. Uh, if you're not, I just want to, I mean, close, uh—

Close with the story of how you and I met and how this relationship has been for over two decades. So, for those of you, obviously, you know that I started my career to sell Persian carpets, very expensive ones here in Palo Alto. And over 20-some years ago, Doug walked into our showroom and he said, 'I'm looking for a carpet in my dining room. This is the size I need.' So the next day, which was a Saturday morning, I remember I packed the entire truck with like 50 carpets or 60 carpets to his home in Atherton. And 10 minutes into showing this carpet, it was just very obvious this man is just a hard negotiator, is hard to please. And it's just, I just, I don't think I can sell a rug.

So anyway, after a couple of hours working over there, when we ended up and he didn't buy anything from me, I said, Doug, and this was a time that I started to invest as an angel investor. This is late nineties, it wasn't really fashionable. And I said, Doug, I'm angel investor, I can help Sequoia Capital. And I just want to really think for a moment, if you're Doug Leone, a senior part of Sequoia Capital, the rug salesman come to your home, And I said, I invest in tech companies and I can help Sequoia Capital. Normally, what would be the kind of expected in their mind that this guy's out of their mind imagine if i was in hollywood i go to steven spielberg's home and at the end said mr spielberg i make movies and i think you and i should make movies together um it's kind of the crazy but but but don't pause and i said i come monday morning 7 a.m to your gallery and you know gallery opens at 10 30. so i made made my life mission that i go over there 5 a.m and

Monday, he came in and said, 'Good morning. You told me you're going to help Sequoia Capital. How?' I said, 'Doug, I know every single Iranian PhD founder at Stanford, and I think there's something there.' He said, 'OK, let's do an event together.' So two weeks after, he brought the entire senior partnership. Mike Moritz was on the board of Yahoo and Google. He brought Mike Moritz himself, Jim Getz, and other people. And I brought like 100 Iranian PhD founders. It was an amazing night. Nothing happened that night. But fast forward after 20 years, that his trust in me, one, gave me the courage and confidence that if I can have this conversation with Sequoia Capital, I can play a role in this ecosystem.

I might not be the best person to provide product feedback, but maybe I can be the best agent in this town that I can connect people. And as a result, we ended up together. When I called him about Dropbox and other companies, we ended up investing together in seeding companies like Dropbox, Guardant Health, and DoorDash. So, Doug, I just want to thank you so much for believing in me 20 years ago. And you did that for so many other founders and so many other people you brought to Sequoia to become an investor. So I just want to thank you on behalf of the whole ecosystem. We all aspire to be Sequoia in our lives.

So thank you for those words. I will say a couple of additions and a correction. One, I did buy carpets from you. You sold me an expensive carpet from San Francisco. Where it didn't fit, I said, 'Cut it.' And you were appalled by the fact I said, 'Cut it.' One. Two, for those of you buying carpets, I did the simple math. If things are priced what they are in one of these stores, they're holding $400 million of inventory. And I knew they could not be holding $400 million of inventory. So I knew these prices had room in them. So that was the second. And look, yes, we always try to meet the founders as early as possible. I remember the event that we attended, you called the Iranian-Indian event, and I convinced you to call it the Iranian, Indian, and Italian—Italian, three I's. Yes, I remember. But I remember...

And I remember you brought the Italian Mafia of Cisco. I forgot, it was a CTO that's very well known.

Mario Mazzola and company.

Mario Mazzola over there. So yeah, we called it...

Thank you for your words. I want to tell all the founders that if you can't sleep at night thinking of the idea, thinking you got to start a business, that is the signal that you should start a business. Choose your partners carefully. Guard your shares carefully. And if you ever want to reach out, feel free to email me. And I'm happy to follow up and mention the Pear meeting, and/or feel free to reach out to Pejman. We work with one another very well and we make a great team. So thank you very much.

Thank you, Doug, very much. Really appreciate it. Have a great rest of the day. Thanks, everybody.

Thank you.