John Lilly: White Space is Everywhere [Entire Talk]

Okay, so this is highly stressful to get up in front of everybody and talk. It's been a little while since I've done this, so I'll do the best I can. I guess I should mention, you know, when Tom was on my board, the first thing he did when he first started talking about it is like, well, are you guys. I'm trying to figure out, are you guys assholes or not? Because life's too short to work with assholes. And so that was the first conversation we talked about when he was talking about being on the board. And then the first official board meeting we had after we took money from Excel, a guy named Peter Fenton and Mitch Kapor. Mitch was there, and Tom came in, and Mitch said, tom, the last time I saw you was the board meeting for this incredibly defunct company. I'm like, oh. So the last collaboration they had done was a company that had gone out of business. Reactivity worked better than that. Yeah, Tom did. All right. So one of the first things you do when you're trying to figure out a talk is you're trying to figure out a title. And I thought about this a long time. I thought about a lot of. I rejected many titles. So this is the title I decided to give, how to Give a Job Like Mine. So it's a reference. So one of my favorite authors is a guy named Kurt Vonnegut, and he gave many talks during his career. They were all named how to Get a Job Like Mine, where he would say, this is the talk I'm going to give. And he would get up and talk about whatever he wanted to talk about. He never talked about how to get a job like his. One time he said, people should use fewer semicolons. But that's about all he did in terms of that. But I liked it because Kurt was interesting. He built a career that didn't look like anybody else's career. And in a funny way, like a lot of the things that Kurt Vonnegut wrote, it's humorous and absurd on the surface, but there was a real truth to it, because I think my point of view is that what he's really saying is the way to get a job like mine is like, well, I'm just me. Be who you are and try to figure that out. And then don't try to be anybody else and don't try to get anybody else's job. Just be the guy you are. And so that's why I wanted to call it like that. And I was actually reminded of it because of Aaron Swartz. Who I didn't meet but made a big difference for a lot of people on the Internet when he killed himself a couple weeks ago under indictment from the federal government. He's. Well, it's a long story, but he's been an information freedom person for a long time and he gave a non ironic talk called how to Get a Job Like Mine about three or four years ago. And that's what I was reminded when I was thinking about this talk. So it's sort of an homage to Kurt Vonnegut and Aaron Swartz. So I'll do the tldr. Does everybody know what TLDR is? So all the computer scientists in the room, TLDR is too long, didn't read. So it's when you're in the Comments like a TechCrunch article or something like that said, well, this article was really long so I didn't really read it. But here's what I think anyway. So I'll just give you the tldr. So the tldr. There's three rules that I live and what I'm going to do today is I'm going to talk a little bit about how I think about the world and I'll talk about my path from sitting in a chair pretty much like these chairs, although not as nice 20 years ago, through being an engineer and an entrepreneur and a CEO. And then I'll talk a little bit about what we do at Greylock and how we think about things and a little bit about what I think the future holds. So I have three rules and it's kind of the framer, the framing. Here's the first thing. Make things. And a lot of them, you make things as long as you can be a maker. The best thing about Stanford is it teaches you how to do things and put products into the world. And the people that I interact with, the people that I like being with now, are the people who really can see things and be product people and can make things themselves. The second two rules actually both came from Tom Koznick and I'll talk about in just a second and they've stuck with me for 20 years now. These are not quite his words. These are Reid Hoffman's words. What Tom said when I was Tom Kosnick said when I was just coming out of Stanford in 1995 is he said, you need to figure out the people who you want to be on your team. You need to look around at the 22 year olds, 23 year olds, 24 year olds who are coming out of Stanford now and Silicon Valley now and figure out the ones you want to work with and play with and collaborate with because 20 years from now you're going to be run in Silicon Valley. And that really stuck with me and it affected the way I think and it affected the way even that my interactions with Reed. So I'm a partner with Reed hoffman, who founded LinkedIn at Greylock. He and I have collaborated in a number of ways. His version of it is find your tribe, figure out who's on your side, figure out who's not on your side and be super clear about it and invest in the people who are in your tribe. Always, like, don't. It's not a static thing. So keep renewing and keep bringing people in, but really, really invest in it. And so I think I can't say this super strongly enough, but like the people who you work with are just about everything. I'll focus on recruiting and collaboration through my whole talk. And what you'll see is that I'll weave some of the same people in. Even though I work with new people all the time, I'll weave some of the same people and the same influences like Tom Kosdick and Tom Byers through the whole, through my whole talk. It matters. It's everything I think. And then the third thing is something that Tom said was do what makes your soul sing. And what he meant is that do stuff that speaks to you. So changing the world is hard. Mostly people don't want change. Mostly the status quo is the status quo because people are kind of comfortable with it and it's easier to keep it the way it is than to change it. Being an entrepreneur is super hard. Nobody wants, like nobody wants Uber, except for Uber at the beginning, right? Nobody wants, nobody wants to communicate 140 character sound bites except for EV and biz when they started it. And so you have to make the world the way it is. There are vested interests that want to keep the world how it was. And so because it's hard and because it's constantly hard because people are telling you you're a moron and why things won't work over and over and over again, it's important to do things that really speak to you and feed your soul and help you grow over time. And I think, I think we forget about growth a lot of times. I think we now say, well, you're 20 or 22 and you dropped out of school and you should be able to run a multi billion dollar company. And I think I say that kind of tongue in cheek. But I submit to you that many people believe it, But I think we forget that growth is human and growth is key. And so finding things that make your soul sing, that speak to you and you love, and that grow you as a person over time is the thing. Those are my rules. That's it. Everything else is a detail. So here's some background. This is seventh grade. That's me. This is our computer club in Las Vegas. So seventh grade. And that's my friend Adam. Nobody's going to remember this, but this is a pet. This is a Commodore pet computer, or maybe the one before the pet. This is a floppy disk drive. It was special because it had two floppy disk spaces and that was a printer. And I guess we had one computer for the club. I don't totally remember it, but Adam and I played a lot of Zork together. And nobody probably knows what that is, but it was an adventure game. There was not a lot of pictures and a lot of text, but we did that a lot. And then we split. I moved and he moved. And it was interesting because later we kind of reconnected over the web. And it turns out that he did the same work that I did in school. So he became sort of obsessed with how people use computers and how the sociological impact. And so he started doing computer design and computer interaction just like I did. So I think a lot of that goes all the way back to what we were interested in seventh grade. So most often when asked to identify what I am by training is I say, I'm a Stanford engineer. How many people are engineers in the room? Yeah, so I've sat in your seat and I've fallen asleep in your seat once or twice. And I'll tell you a story about that in a second. So I did a BS in Computer systems, which is like half doubly and half Computer Science, and I did an Ms. In Computer Science, and I did it in something called hci, which is Human Computer Interaction with the very, very early days of this. And I'll tell a story about that in just a second, too. Tom mentioned this, but the best decision I probably ever made, the best work decision I've ever made, was to be a section leader in Stanford. And the reason I was at a D school class this morning and one of the quotes that they made is that the job, the job of a leader is to create other leaders. And going through that in CS198 and helping people learn how to teach other amazing students at Stanford was such a fundamental experience. For me, that it changed how I thought about everything, really. And it turns out that in practice, you can see this network blossoming everywhere in Silicon Valley. Marissa Meyer from Yahoo is a section of the year. Brett Taylor, the former CTO of Facebook. Martin Mike Schrepfer, the VP of Engineering of Facebook. All these people are section leaders. And the lineage is an extremely impressive one. And I think it all goes back to thinking about how to create other leaders and how to teach other teachers. So that was the best works that ever made, bar none. My most embarrassing moment that I'm willing to talk about on film was in CS547 in about 1993, when I fell asleep when this guy from Switzerland, Robert Kelly, who brought this ridiculous box, it was this big black box. It's called the Next Computer, which is where Steve Jobs went after Apple. And he did this demo of this thing called a web page. And I fell asleep while I was doing it and it was in Skilling Auditorium. And I just didn't get it because I saw pictures and text and click, click, click. And he clicked some links and there's some other things. I was like, well, this. I fell asleep and then I woke up and everybody was leaving. And so anyway, after that I rallied and so I did better. The thing that I read at Stanford, the thing that changed my life, all my career, you know, when I came in to Stanford, I was really interested in the kind of stuff that John Hennessy was doing. And I'll talk about computer architecture, about how to make computers go fast, fast, fast. And then I had a couple of mentors at internships that I was at at sun, which is not kind of where you think about HCI coming from, but, but also here at Stanford. And there was a guy in my dorm, Shawn White, who I'll talk about through this piece, through the conversation today. And Shawn kept telling me I should do this thing called hci. Shawn was one of Terry Winograd's very first grad students in design at a time when we were just trying to figure out what the difference in design was and human factors and usability. And Sean said, you've got to do this, you'll love it. And I was resistant, really resistant. I was like, no, no, I'm a computer architecture guy. I'm going to do multi core instruction sets in silicon. And obviously I just really wasn't interested in hci. And then I read this piece by a guy named Mitch Kapoor. And Mitch is the founder of Lotus. He was one of the first people that really successfully commercialized the spreadsheet. And he wrote this piece called the Software Design Manifesto. And what he said is that software needs architects, just like buildings need architects. I think we think about this. I think it's obvious now, but it wasn't obvious in 1991. And it's interesting because I was just reading it today. And what he said in 1991 is that the revolution hasn't succeeded because what started as this very human counterculture thing to give PCs to people, that was a revolutionary idea in the 80s. What he said is, well, shit, this has become the mainstream now. Computers are defining us instead of us defining computers. And what I read is when I read this bold thing, he could have written this today, and he could have written about mobile instead of computers, and phones instead of computers. And what he could have said is the revolution hasn't yet succeeded because in spite of the amazing progress and the amazing work that we're doing with these things, we're still not fundamentally human in our interactions with technology. And again, that's a thread that's led all the way through my career. And I think we're finally waking up to. I think it's Steve coming back to Apple. Finally woke up the world about how important design, how important human factors is, more importantly, how important thinking about technology in context could be and how powerful it could be. So Mitch changed my life. And eventually. Well, I'll come back to that in a second. I joined a company called Trilogy Software out of Stanford. And as a vc, there's a funny thing that happens, which is if you come pitch me, I believe there's a high likelihood that I can tell you where your first job was, if it was at Google or Apple or Amazon. And it's because. Because the first place you go out of school tends to imprint you. So Google, they tend to have a very, very sort of let's AB test kind of attitude. Apple tends to have a very, very slow design point of view. Zynga was like Google A, B testing, but like times 10. And you tend to really, really take the lessons of the first place you work through your whole career. Trilogy, the key was recruiting. All they cared about was getting awesome, awesome people. And Trilogy wasn't a successful company. Ultimately, it's still around, it's doing okay. But thank God I went there because recruiting is so central and so core, whether you're a startup or a growing company now. And that's been another lesson. So I think that picking your first company and even whether you choose to start up or not is a Key, key decision, choosing to start. Joe Krause, the founder of Excitement and a friend. He's a partner at Google Ventures now. He likes to say you learn more from successful companies than you do from failures. If going off and doing your own thing, that fails. You learn a lot, but you don't always learn the right things. And that going to a company that's successful is like a rocket ship. And a guy like Matt Kohler is a good example. So Matt joined Reed as he was starting LinkedIn and he saw so many things going right at LinkedIn and then he went to, he joined Zuck at Facebook and now he's a partner at Benchmark. But I think seeing good examples of the right kind of scaling, the right kind of organization building is huge. I mean, failing is OK too, but it's not as good as winning. So then I went to Apple where I'd been as an intern. I learned how to play with technology and I was in a part of Apple that we were looking at education, we were looking at playfulness, we were looking at children. And that was fun because I figured I started learning about how to tackle big problems with small solutions. And it was when Steve came back. And the happy thing for me is that Steve really didn't like my group very much. And so he started firing everyone, which caused my group to die and a lot of people that I cared about to leave. And it helped me leave to start my own company. And I was kind of grateful for that. But there are some interesting Steve Jobs stories and the one I'll tell you is that he came back at a time when the market cap of Apple was the about approximately equal to the cash we had on hand. And nobody remembers this and it sounds ridiculous. It's the time when Microsoft was dominant. Sun was incredible. Sun looked like sun was going to buy Apple. And I know none of you remember this, but it looked like Apple was dead. And Steve came back because Apple acquired next and then he took over and nobody believed in it. And I remember this town hall in a room from, for atg, for the Advanced Technology Group, in a room about this size. And Steve was up on stage and in the press the day before. The press had asked Michael Dell, who started Dell Computer, what Apple should do. He's like, well, shit, I think they should give the money back to the shareholders and shut the thing down. So obviously he's got some poignance now given the things that Dell's going through and how Apple's done since then. But, you know, so Steve gave This big talk about how they were going to reinvent Apple. And somebody asked him, what do you think about what Michael Dell said? And Steve paused and he's like, well, fuck Michael Dell, no joke. He said, fuck that guy. And so he said, you know what we're going to do? We're going to reinvent the company. Yeah, I'm sorry, I know it's broadcast out. I am who I am. 8 second delay or something. We should pause and give me an eight second delay. It's going to happen again anyway. So Steve said, you know what? We're going to build a great company. We're going to reinvent the world. And anybody who believes me, let's get moving. If you don't believe that happened, then get the hell out. And this was an amazing act of leadership because it was so clear who was in and who was out. And I'll tell you, people in the room would have followed Steve everywhere, anywhere, just about anywhere. Now it turns out me and my friends left and we're happy with that decision. Although economically it probably would have been better to stick around. We've all done okay. But what I'm an active leadership by a guy who nobody believed in at the time. Nobody believed in. So after that I left and I started my company called Reactivity. And I don't know what to say about Reactivity. I'll tell you, being a founder is such a complex set of things. We started it in my kitchen with my mentor from Apple and my best friend from Stanford who was a section leader and then one of the people who went through the HCI program with me at Stanford. I still can't process it exactly. I'm very, very proud of what we built. We eventually sold it to Cisco a few years later, but again, I think the recruiting and mentors and connections was the thing. We got Mitch Capehart invest in us from Excel. I've collaborated on him on a number of things and he was the way I eventually got to Mozilla. There's another guy from Excel named Peter Fenton who's now a partner at Benchmark. And Peter stayed on the board longer than I did, longer than I lasted at the company. So I was there for seven years. Peter lasted two more years beyond that. And as I see so many founders now think about venture investing or getting that a round as a transaction, I just need to get this done as fast as I can and get the money in the bank and move on. It's such a crazy point of view from my perspective, because you're going to be with these people for years. They're going to affect the way you think. You're going to affect the way they think. You're going to have up times, down times, you're going to yell at each other, you're going to go through happy times. And it's really, really careful. It's as important how to choose your investors as it is how to choose your management team. Except you can fire your management team, you can't fire your investors. And so I don't know, I was very, very lucky because I didn't really understand how far reaching a decision it was when I took money from Mitch and Peter. It worked out very, very well for us emotionally and it's a business as well. And then the best accident of my career is that I joined mozilla. So in 2005, I was going through this period where I was trying to figure out what to do and I thought I was going to do venture. And I just couldn't find the right venture firm for me then. And I accidentally, because of Mitch, I accidentally got sort of involved with the Mozilla people. And Mozilla at the time had just launched Firefox about three or four months earlier. They had just signed a deal with Google that made it economically viable. It was an open source nonprofit, which is not exactly what you're looking for when you're doing a job search. But I couldn't escape it. I felt this incredibly strong gravitational pull to go work on the browser because the web felt so important and so under pressure at the time. And again, you won't remember this, but I'll show you why that's important. So this is what it looked like just before I got there. And again, you're not going to remember this. So Microsoft was dominant, dominant, dominant, 96% of the computers in the world. All I see out here is Macs. That wasn't the case in 2004. 96% of the computers in the world that people used were Windows. And, and all of them, all of them used Internet Explorer. So that was a bad. This was such a finished chapter that Microsoft took their Internet Explorer team and they said, you guys are not working Internet Explorer anymore. Mission accomplished. And they put them all in Silverlight, which is, as you know, is going to be huge. This is a mistake that Microsoft made that took them years and years and years to come back from. And I would argue that it really, it really opened the door for a quick downfall for Microsoft. Four years later, in 2008, we were about a quarter of market share, 9% is Opera and Safari and some other stuff. And then now this is ie about 55%, depending on how you count. This is Chrome and this is Firefox, again, depending on how you count. And this is some other stuff, Safari and Opera. And if you include mobile, the world changes quite dramatically. And I'll show that in just a second. But from Mozilla's point of view, this is what we wanted. We didn't want the same as this, but orange. We wanted robust. We probably could be happier with the blue, slightly smaller. But this is what we wanted. We wanted a robust competitive market where you had people innovating and trying to be good for consumers. Because we felt like that was our mission of a nonprofit. I feel like in large part we made that happen. It's important to talk about how we made it happen because we were this funky, odd, open source thing that nobody much understood. And I'll tell you, I think it took Microsoft probably two years to figure out what the hell we were doing. And I say that because we weren't trying to be them. We weren't going to trade shows. We weren't doing deals with Dell, we weren't doing any of this yet. What we were doing is we were trying to find the biggest community we could and make them all owners make as many people responsible for translation and code and distribution and user interface as we could. And I showed this picture, this is a picture of the Internet a while ago. It was smaller then. And what the Internet especially is a system called chaotic systems. And chaotic systems are sort of half chaos and half order, but they're, they're roughly, they're multinodal systems where you have multinodal authority and no center of gravity. And so that's what the Internet is. And that's what Mozilla is in many ways. So we had people who were responsible and we really gave them responsibility whether they worked for us or not. And it was just. We competed asymmetrically. We were open source. Microsoft didn't understand what to do with that. How can you compete if you give your source code away? We were community driven. We were. We were a nonprofit. Now it turns out that Mozilla makes many hundreds of millions of dollars a year now, and we profit a significant portion of that. So nonprofit is more of a mission statement than it is a balance sheet statement. We're a pretty successful nonprofit. And I'm sort of obsessed with nonprofit sustainability, which is why I'm involved in Code for America and some other nonprofits now. We didn't try to be them. I think that's true too. I was talking to some people at D school this morning and the most interesting, successful companies at scale, Facebook, LinkedIn, Pandora, any of these, I think they're all different and so they're not all afraid to rethink back to first principles, how to run the company. Google doesn't run like Apple in the slightest, but they're both interesting, meaningful companies. And so I think a lot of times you get caught up with how do we act like a professional management team or how do we act like an establishment company. I think the most interesting companies don't do that. The most interesting companies think about, well, who are we and how are we successful in that context and what do we need to add to be different than who we are now? And then ultimately we involve millions, millions and millions of nodes and millions of people and we try to help have everybody, like a political movement feeling, feel like we needed them to be successful. And I think that's the key, I think, to a lot of community projects, which is you have to be successful enough that people can see promise, but fragile enough that they think that you need their help. And the example I'll give is I'll show my political leanings just briefly. In 2008, I made phone calls for the Obama campaign. So I called a bunch of people on election day in Western Pennsylvania, which was illuminating, and I told them they should get out to vote. And I did it because I thought it was a thing worth doing and I thought Obama might not win if I didn't go call. And that sounds ridiculous, but I think that's the key. I think nobody wants to go join a thing where they don't need you. And so you need to have a project that has promise but still needs you. I think that's central. So Mozilla was a pretty happy accident for me. And then about two years ago this month, I joined a firm called Greylock Partners and I'll do just a quick version. Greylock's one of the oldest VC firms for a billion dollar fund. We're on our 13th fund now. There's eight of us who are active investors. We've all operated. Six of us have founded companies, two people have founded. One of them founded a company while he's at Greylock. It's called Workday. It's one of the most successful IPOs. This year, another one founded it before he got to Greylock, called LinkedIn, which is a pretty meaningful company too. And so we all have operated at Scale, which means, you know, we've all been around very, very special ramps, very, very special companies. And so we all are able to help. We all love product, but we all have the sense to leave things alone when they're working and really have the entrepreneurs, the genius of the entrepreneur, blow it out. But I think we can all help when they struggle. Software only. Enterprise software, consumer Internet, all stages. I think I've written a $50,000 check and a $30 million check that presents its own challenges. It's a big spectrum of things you're able to do. This is who we are. Over the past 24 months, we've had a ton of exits, and the exits are interesting, but it's all work that my partners did five, 10 years ago in the downturn. I think the more interesting work is the one and two person companies are doing the garage. Now. Who will show up on this chart when I'm back in a few years, maybe. This mostly will look like any other VC will put up, but I'll give some color on it in a second. Great products, great teams. And when I say get all the way to the finish line, what I mean is you're not looking for acquisition. You're looking make a big, fundamental, durable company. And there just aren't very many of those. And I'll illustrate that in just a second. And then we kind of obsess about distribution. Probably more than any other firm, we're focused on distribution because whether it's enterprise software or consumer, the key is, how do you get enough people to give a damn about your product and use it? That's a simple question and a really brutally hard question to answer. So we care about distribution. And I'll highlight that in a second. So very large, very durable companies. So since the beginning of the Internet, give or take the web, 1995, so maybe 17 years ago, how many consumer Internet companies, which is where I focus, do you suppose are on the public markets that are worth more than a billion dollars? Do you think it's 50 or 100 or 10 or anybody have any guesses? 50. 50. It's more than 10, but it's not many more than 10. The answer is 24. But if you really parse this out, 24 is not a very big number. 15 years, 24 companies. And so because, like, look, I'll show you my calendar in a second. So I meet about 300 to 400 companies every year. And what I'm telling you is that one and a half companies a year between 1995 and now are worth more than a billion dollars on the public markets. That's crazy because I don't even see most of the companies. I see some fraction of consumer companies at 350, 400 companies. So here are the 24. It's kind of interesting. I actually don't know what Vistaprint does like, you know, ancest. What's that? Business cards. Who knew? Thank you. You know, we were lucky to be involved in some of them. So how many people, how many of these do you think are worth more than $10 billion? Because every firm will tell you they want to invest in multi billion dollar companies. Everybody's counting. It's not half. Seven. That's it. So this list I submit. So this is the consumer Internet. There's other things. The enterprise which has a number of companies, there's little companies like Apple and others that are pretty big on the hardware side. But this is the seven consumer Internet companies that are 10 billion or more public market cap independent companies now. So it's worth looking at those and understanding what's special about them and understanding what's similar and what's different from our point of view. All of these, everyone except for maybe Priceline, maybe Yahoo. You get serious network effects, serious distribution advantages. As you get bigger and bigger to scale. We tend to be obsessed with things that have baked in network advantages because it lets you get big quickly and it lets you be robust for a long time. Ebay, I mean ebay's gone through so many challenges. Yahoo too. But their built in distribution effects have kept them alive for a long time and now they're both in a period of reinvention. So let me give you a brief aside on virality, which is probably the most overused term that I hear. So most people say, well, our product is totally viral. And what they mean is their product, people are going to love their product so much they're going to talk about it to their friends. So for us that's not viral. For us, the specific and actionable definition of viral is it's useful for me to get all of you on the system because that makes me want to go turn all of you into users. So photo sharing is something that was photo taking on the iPhone. So when you first got your camera, photo taking wasn't viral in any way. It wasn't network effect. You take your picture and then it would sit on your hard drive. What Instagram did, what Kevin and Mikey did, is they created a system where for me to get value, I had to turn all of you guys into Instagram users, that's viral and that's a special kind of network characteristic. Anything else is basically word of mouth, maybe network effects, but virality is a really special thing. And the thing I like about this definition which came from Reid is it's really actionable. It really starts to get you to think. It's like, oh, I'm using this in a single player mode. I'm thinking about this as a one person product. But now how do I think about it if I want to use it with my wife or my dad or my cousin or my classmate? And that's a really powerful way to unlock on the consumer Internet this idea of network effects and network spread. So here's the bottom line that everybody's going to tell you they want to invest in the multi billion dollar companies. And I guess I should say too that venture capital is not all the same. Different funds, different things for us and maybe a handful of others. What we look for is the Facebook style returns, the LinkedIn style returns. Big, big durable companies that are going to be fundamental in landscape changing. What that means is as a matter of course, you make a lot of mistakes because you're peering through a glass darkly. But this is what we try to do. It almost never happens 24 times on the consumer Internet in the last 15 years. And there's a few more that got bought like Instagram and YouTube and a few more on the sidelines like Square and some others that are looking pretty good. But when you do it, you change everything. So my profile. So just some quick observations about VC life. This is my heat map of my calendar from 2012. And so the red days are days when I had eight or more meetings and the orange days are days when I had five or six. So kind of lighter days. And then the yellow days, maybe I had two or three meetings. And the only reason June looks like that is because my wife and I had our second child. So I try to take fewer meetings that month. In truth, I didn't take any meetings. I was probably like going to the gym and stuff like that. So here's the thing, and I didn't really understand this when I was an entrepreneur. And so I'm trying to communicate to as many people as I can. Venture capitalists, all they do all day is they try to find the best entrepreneurs they can and they try to respond to as many entrepreneurs as they can and they try to the best ones try to be helpful and add value. What that means is you might a lot of VCs will see 400, 300 companies a year. And most VCs invest in two or three companies a year. That's 1%. It means you say 99 times, you say, no, no, you're like, not for me. Which, as a maker, it's a hard thing to do as a guy who comes in because what you're doing is everybody's coming in and they're pitching you what the future is going to be. They can see it, it's already finished for them. The best entrepreneurs can see the future. And what you're doing is you say, okay, I get this, I get that you can see the future. It's just not for me. And so sometimes that's a very hard thing because sometimes you're saying because you don't believe it, sometimes you're saying it because you don't like it, sometimes you're saying for any variety of reasons, but saying 99 no's for every one. Yes, that's a tough ratio and it's useful to understand it. Context switching is brutal. So you can have even in just the consumer Internet. This is why we specialize a little bit. You, you might see a photo sharing app, and you can see a lot of photo sharing apps, but you'll see a lot of different things in the course of just one day. And you'll try to be helping your portfolio companies at the same time, and you'll be trying to think about how to help your partners and everything. So it's a lot of context switching. And as a result, timing is everything. So since you're only doing one or two new companies a year, it really is key, you might just be busy. So we passed on Tumblr, excuse me, on Pinterest, twice in 2011. The first time we did it because we just didn't think it was going to get big, which turned out to be not true. And the second time we did it, it was just hard for us to run after because I was in the middle of finishing up investment in Tumblr. So Tumblr was kind of related and we couldn't really pay attention to it. And so it went by in a way that we couldn't really, I couldn't really aggressively pursue. So timing really, really is everything. And then here's the thing that I think nobody really kind of internalizes. Like, we're all super, super quirky and super idiosyncratic, just like any other collection of humans. So every firm's different, every person's different, and you really have to understand who the person is that you're talking to not, oh, I want to pitch Excel or Greylock or Sequoia. So very, very idiots and craft. We all make decisions differently. We all prosecute things differently, we all think about things differently. This is what happened. In my first 24 months, I've done five investments. Citrus Lane, E Commerce for moms. Clear Slide. We're trying to sort of a business app. We're trying to kill Webex for salespeople, Tumblr, Dropbox and Instagram. You probably know one thing that's worth mentioning. Citrus Lane was a Mayfield fellow named Mariah Finley, who started that company, CS major and master student. Clear Slide is a guy named Al Lieb who's a computer scientist from Stanford who started Evite and now he's the CEO. Tumblr was a guy named David Karp who dropped out of high school in ninth grade in New York and taught himself how to code. Dropbox was Drew, MIT computer scientist. And Instagram was Kevin and Mikey, symbolic systems majors from Stanford. So I like makers. I like people who are passionate about product, who make things, who really are desperate to build things that people love. And for me, that's been most fruitful has been to look in places, engineering schools, design schools, and that's where I hunt more often than not. And it's not to say you can't be like that as an MBA. A lot of MBAs get tweaked when I say that. I think anybody can be a great product person as long as you have the passion and the ability to follow up in the details on product and make them great. So that's my first 24 months. So we'll see. Instagram is a slightly funky investment because we wired the money on Thursday and Kevin sent me mail on Sunday, said they were getting acquired. So that was unusual. So here's the future. I'll give you three charts and then we'll open up for questions. This is the whole thing. This is where I spend all my day thinking about. This is the Internet. In the past five years, it's grown a lot, so almost doubled. And it's useful and instructive to see where it's growing. I think many of the interesting communication apps like Line and Cacao we're seeing come out of Asia. North America is pretty well saturated, I think, and hope as a citizen of the Earth, that we're going to see more and more growth out of Latin America and Africa. This is pretty meaningful. This is a bit of an eye chart, but what it is is between 1975 and 2011 oh, by the way, this is Asimco. Asimco. You should all read this blog. He's going to read a conference today, but he writes some of the most thoughtful stuff about how devices are proliferating in the world. Everybody should read it. And what this says is, in a logarithmic scale, thousands of units per year between 1975 and 2011. What do we ship? And so what you can see is like, well, here's a TRS 80, which again, I guess I'm an old guy. So TRS 80, I remember, here's the next Steve wasn't very. Steve wasn't always successful. Here's the Commodore 64, which is awesome. The Macintosh, that yellow line. The PC is this big line. But what I want you to notice is like this period here, nothing was happening. The PC and the Mac. And I'll show it to you in a better way in just a minute. But now everything's happening. We're seeing a Cambrian explosion of devices and screens and sensors. Everything's in play right now. The other way I'll show it to you is this way. So this chart I call the Dark Ages of computing. So the blue is Windows. So from 1987 till recently, Windows dominated. So as I was putting this together yesterday, I'm like, man, this looks like the Dark Ages. It's like we fell off the map. Innovation stopped. It was dominated by just Microsoft. The snarky part of me says innovation at Microsoft during that period is probably an oxymoron. But it wasn't a good time. You had this little bit of Macintosh, but Macintosh wasn't a very good time either. We were going to get bought for the amount of cash we had, right? This sucked. It sucked, sucked, sucked. But now it doesn't. So this is 2011 and it's getting better. So now you've got. I read something the other day that for the first time in probably 20 years, more than 50% of emails were read not with Outlook. And it's because it's on your phone. It's because it's in your tablets and phone and on your TVs. This is going to change everything. For the first time, we've got this incredibly high energy explosion. I think things are in chaos. So the question to you guys is there's white space. So we don't know yet whether we'll go into this Dark Ages where one of these dominates for another 20 years. I hope not. And I kind of don't think so because I think that the amount of our lives we are mediating through mobile, through computing generally is getting higher and higher and higher. So my view is we're exiting the dark ages. Everything's in chaos. Everything is a promise. There are going to be a bunch of funny starts. There's going to be a bunch of things that grow and get big and disappear off the face of the earth. Just like the sort of Cambrian explosion, right? Pre Cambrian explosion, or like the Renaissance. We'll have lots and lots and lots of ideas. And this is the time we're living in now. So the question for you guys is, what will you put there? And I think this is the essence of entrepreneurship, which is like, well, I see that map. I see how it sucked before, but I'm going to draw it my way now. And so I'll tell you, that's the most exciting chart in the whole time that I've been in and around computing. So I'm going to do recap. Three simple rules make things. You'll make a lot of mistakes. The more you make, the more you'll get right. Find your tribe, choose to work with people you care about and you can live with and you want to collaborate for a long time and then do what makes your soul sing. And then I'm going to give one. I'm going to give a gratuitous Jim Harbaugh picture of wearing Stanford gear. So the thing I like about Harbaugh, he's a little nutty, but I like him better. This is my favorite Harbaugh picture because it was after the USC game where we may have gone for two when we were ahead of USC by maybe 30 points. And Pete Carroll goes, what's your deal? And Jim Harbaugh goes, what's your deal? And then they run off the field anyway. So I like Harbaugh, but he's got this thing that he took to the 49ers from his family and he asked people, who's got it better than us? And so I would just say you guys are all sitting here at Stanford. At Stanford, at a place where the computer science department is strong, where you've got many, many, not just one or two entrepreneurship professors, but people running whole programs at a university run by an entrepreneur and an engineer in the middle of capital, mentors, entrepreneurs, companies. Like, there's nobody that's got better than you people do now. And so I would just say that there's nobody that's in a better position to change the world now than there's ever been, really. So I think with that, I think we'll Go to Q and A and then we'll go from there. Is that okay? Questions? Sure. Your list of 24 had what I think might be a few first to market companies and one not on the list that even identifies Skype. One of the already voiced. Oh yeah, that's correct. And when I look at them is were there first to market challenges that kept them off the list or management issues or something else maybe. Oh. So the question is, well, there are a bunch of first to market companies that show up and disappear. And I guess, I don't know, I don't know. I haven't done any analysis on why that happened. One thing that's worth mentioning is that what we did at Mozilla was attacking an incumbent market, which was pretty static at the time. And that's a different thing than what say Instagram did, which was on a mobile. And you've got green field and you're just trying to go as fast as you can. So it's pretty important to understand the field that you're playing on. And you're right that you look back historically, what I did was mostly illustrators say, look, building a company is hard recruiting. Answer probably is to the point on that. Yeah. Once you get big and once you get public, recruiting gets brutal. And I think that's truer now than it's been ever. Next question. Sure. You mentioned that you invest only from one out of every hundred companies that you see. So what I was thinking is that it might create some mindset in you that you might become very negative towards investments. And so do you use any tools or are there some things that you say to yourself before you get into a meeting so you don't fall into that trap of being overly negative? Yeah. So the question is, if you say no 99 times, doesn't that make you a little bit negative and doesn't it create a jaded or a cynicism trap? And I think that's true. I'll tell you, when you say no 99 times, it doesn't mean you're not interested in 99 of the meetings. So almost every meeting is interesting. Almost every meeting you can learn something from. And almost every, I think in every meeting somebody is sacrificing much of their lives to make this thing, this future that they can see. True. And so I think it's our job not to be jaded. And I think that if you get jaded too much and if you find yourself there, you sort of shake yourself and try to get better. If you can't shake yourself, then you shouldn't do investing anymore is my view. So I'm the new guy. So I'm two years into this. I'm not jaded yet. And I'll tell you that you have one meeting with an entrepreneur in a year that turns into an awesome working relationship that lasts for years or decades. That's enough. Next question? Sure. What's the biggest reason that you turn down people? Do you look more at the potential in the idea or is it the potential in the person? The question is, what's the reason I turned down companies? I guess is it the lack of potential in the idea or lack of potential in the person? And I don't know. Look, after an hour meeting, I don't know anything about you really. And that's one of the things you got to understand as a VC is like you're doing lots and lots and lots of one hour meetings and you're not doing very in depth things. So what you're trying to figure out is people you're interested in learning more about over time. I would say there's, there are bars that you have to get over in terms of market size, distribution characteristics, product quality, demonstration that the person knows how to make things. And then I think you just try to figure out whether it's the one for you or not. Like a lot of things I turn down just because it doesn't resonate with me. I think they'll do really well, but it's not for me. I think it's easier to say why you like things. When you say I'm going to invest, it's because you believe in the person and you believe in the market and you believe in the product. And when those two things come together, that's the key. So it's easier to say what the positive characteristics are than the negative. For me, sure. Why did you choose to become a vc? Looking back at being an engineer, CEO, an entrepreneur, what do you think you like most? So the question is why did I decide to. Why did I decide to be vc? Sorry. Which I meant to answer in the presentation. And the second question was which job would I like the most or what role? I decided to be VC because I thought I could be good at it and I thought I would like it. That seems like kind of obvious, right? I thought I would like it, thought I could be good at it. Fundamentally, I've had a really good time building ventures and building management teams. Scaling Mozilla was probably the most fun thing I've ever done. I like working with great people and great entrepreneurs. And it's not more complicated than that. This felt like something that I could be really good at and have a really good time at. As far as roles, I don't know like I think you should. My own journey is I've always tried to find things that I could be world class at. So I've always tried to find things that I could make the biggest difference in the world and be, I don't know, one of the top five, 10, 20 people in the world at it, which I'm clearly not. As a vc, I'm new and you know, when I came out of Stanford, I was an hci. Well, when I was undergrad I was a programmer and I realized really quickly, like I'd never be a world class programmer and I could find other people to be programmers, but I wanted to be a designer. So I went to be a designer and it was really clear, really fast that I was not ever going to be a world class designer. I could be good at it, but I would never be a top 20 designer in the world. But I thought I could be that for organizations. And so when I came out of Stanford, I started managing a group at Trilogy and I started managing people at Apple and started my own company. And I felt that organizationally, like I feel some competence at. And I say that kind of in a specific way because I really feel like as soon as you feel like, you know things like, you start to be kind of stupid. And I feel like organizations and ventures in particular is a learning process that's continual. So everything's new. So I don't know. I'm two years into this job. People tell me it takes a few years to figure out what to do, what your style is, and it takes a few years after that to figure out whether your style is any good or not. I'd like to make it shorter than that. So that's what I'm trying to work on. But I don't know. I like all the jobs I have and they're all frustrating too. Can you comment on work life balance and your experience of working with women CEOs and how they navigate that to your question? This feels like a complex question. So the question is, can I comment on work life balance? But it seems to me like the question you're actually asking is the other part about women CEOs and the challenges and how they've navigated. So how do I answer this? There are not enough women entrepreneurs, There are not enough women CEOs, there are not enough women executives, There Are not enough women scientists? There are enough women in the workplace generally. I think it's a brutal problem. I think that it starts very early and I think that. But I think that's not the only problem. I think that the expectations around families and caregiving is also another problem. You know, we're going, I have a seven year old son, but also a six month old, seven month old son. And you know, I look at my wife who's had to take a pause from the workplace because we've prioritized that work for her now. And it's, I think, challenging. Challenging. No way around it, you know, Mariah, I found it. I'm on Mariah's board. Mariah Finley at Citrus Lane, she's got two small kids and she's, she's amazing. She works really hard and she really prioritizes her family. And I don't quite, I couldn't quite tell you how she does that. I'm also on the boards of two nonprofits that have female leaders, Mitchell Baker at Mozilla and Jen Palka at Code for America. And they're incredible. Just full stop, incredible. So I don't know how to answer that except that we need more, we need more people thinking about it. It is a hard problem that I don't know how to solve at a micro level other than to just keep trying. Other questions how will you define social entrepreneurship and what do you think about its role in emerging markets? How do I define social entrepreneurship and how do I think about its role in emerging markets? I think entrepreneurship, full stop, is like having a view, like I said, having a view of how the world needs to be or will be and then making it happen that way. Social entrepreneurship, I think, in my view is like how do you do that in a way that creates a social outcome as a top line as opposed to an economic outcome as a top line? This is what we did at Mozilla. The goal was not to make a lot of money. The goal was to make the Internet open and participatory at a time we thought it was not. Code for America is to make citizenship better and to help more of us be citizens. I think that we're going to see more and more of these because the Internet's driving down costs to start. So technology costs and the cost to find people who are like minded and have a similar vision of the world to you, it's going to almost to zero. And so you get organizations like Kiva and Encode for America and others. Distribution costs are almost at zero now. Too. So I think that. And then I think the thing I'm obsessed with is how do you fund social enterprises or not for profit enterprises? How do you fund them in the market? Which is why I'm so proud of what we did at Mozilla, which is we used search and some other things to fund this nonprofit mission. I think that's totally possible because you're driving cost to zero. I don't know much about the emerging developing world, to be honest with you. We did a lot of work there and we had a lot of adoption with Firefox and Latin America and Africa. I don't know. I think we're probably going to learn some things by how people deploy wireless networks and how people live their lives on mobile phones from developing nations pretty quickly. So I guess I'm hopeful. I think that the basic equation though is driving costs down to zero to start these things. Then you can start, which means you don't need as much sort of voracious growth to run the things over time. Other question. Sure. So on the slide about, you mentioned that there's a lot of context switches. So how do you stay productive through all those context switches? Yeah, so the question is, how do I stay productive through context switches and shit? I don't know. I find it kind of depends on the day. Some days are better than others. And I'll tell you, when I was an operating executive, I would come home and my wife would ask me what I did and I'd say, well, we did this and this and this other amazing thing, and she asked me what I did now. And most days I have to look at my calendar, say I'm not sure because the 8am meeting was eight contexts ago. And so it's a tough challenge. So I think that the thing that I struggle with the most and the thing that I find other interesting investors struggle with the most is like, how do you. Number one, how do you live in your outbox more than your inbox? So how do you decide, like an entrepreneur, how do you decide what the effect you want the world to be is? And how do you find. Decide what the interesting things are and how do you go after them as opposed to being reactive to everybody else who wants your time? But the trick is like, how do you do that and still remain accessible and responsive to. To many, many people who want your help? So I would tell you that I think everybody good struggles with this. And I don't have a good answer yet. Sure. My question is just about how you said you want to find Your tribe. And what I was wondering is how you go about figuring out what types of people those are for you personally, and when you do find them, how you know that they're the people that you want to be around and continue to build that relationship. Yeah, that's a good question. I didn't anticipate, which is, so how do you find your tribe, and how do you figure out who's in and who you want to be around? And if it's worth it? I don't know. Coming to Stanford is probably a pretty good start. And one of the. I think Warren Buffet's got this quote. I think that it's like what you try to find people to work with is people who have integrity, energy, and intelligence, because if they don't have the first one, the other two will kill you. And so it's like, without integrity, the intelligence and energy will totally screw you up. Right. And so there's some baseline things, like you just have to figure out where your integrity line is and all that stuff and what fundamental values are important to you. Beyond that, I think you got to try hard to put yourself in situations that are hard. And one of the. I haven't ever given this talk, but I've got a title for a talk I want to give some time, which is called the on the virtues of getting your ass kicked. And what I'll tell you is that I've gotten my ass kicked so many times, and when I got to Stanford, I was going to be a physics major until I got, like, a C plus in Physics 63. Right. And it was so clear that I was not able to cope with those guys. You know, when I was CS198, the thing I'd say was the most important decision I ever made. Well, they turned me down the first quarter I applied. They turned me down the first quarter, and then I applied to be the coordinator. They turned me down the first two quarters, and then the third time I applied, I got to be a coordinator. The first time I looked to be a vc, I didn't really find the right thing. The first time I started a company, I didn't really find the right thing. I've got partners, Reid, who go from thing to thing and success to success. That's never been my experience. And I don't know, I think that if you are really aggressive and try to put yourself into hard situations where the people around you kick your ass all the time. So being at a table in our partnership, it's a murderer's row. So people invested and created the biggest SaaS companies in the world, the biggest networking companies in the world, Facebook. So billions of dollars in returns and I'm the new guy with five investments and we'll see how it goes. It's an intimidating table to sit at. And then it's intimidating to say things. You do the best you can. And then people say, well, that's kind of the dumbest thing I've heard all day. And to be clear, nobody at Greylocks ever said that to me, although I'm pretty sure they've thought it. But if it's only the dumbest thing today, that's fine because then you'll learn and you'll get better. So that's what I would say. It's just be clear on your integrity and then put yourself into situations that are hard, hard, hard. Sure. So your white space chart looks a lot like the banking system where it's not been disrupted for a long, long, long time. And I just wanted to hear your thoughts on disrupting banking and what Silicon Valley can do to as you look at Beyond Square. So the question is the chart, the dominance chart looks a lot like the banking industry, which has not gotten disrupted at all. You know, how do I think about the banking industry and opportunities there in, I don't know, like Instagram, Dropbox, Tumblr. That's my kind of thing, how we tell stories to each other. The banking industry I'm interested in because I think that. But I think every system we use is about to get blown up. I mean, you think about how different, like five or six years ago, like we weren't using YouTube every day, we weren't using Facebook every day, we didn't have phones, we didn't get. You know, when you're out and about and your 7 year old son asks what difference between Kid Fisto and Cad Bane is? In Clone wars, you didn't have an iPhone to pull out and look it up on Google. But now I know what's the difference between every Pokemon card ever. So I would say that everything's changed so quickly, but I think we're still at the very, very, very beginning. So I would just say every system that doesn't look like it's a native mobile real time system, it's all going to get busted up. There's opportunity everywhere. So I don't have very good banking answers in that. My partner Reid probably would given his experience at PayPal. But things are hard. Banking's hard, but it'll blow up. Sure. One more question. Sure. Simple question. Is assume I'm a budding entrepreneur, already an entrepreneur. How do I approach you? And I mean not you, just venture capital. And what is the. I mean, is it a gut feeling that when you hear me out, they take an hour or two hours. At the end of the day, it's something. It has to collect the vision, the long term vision. Plus it has to. You said about distribution. At the end of the day, something has to click. Is it the gut or the heart or the brain or the combination of three. Two questions. One is how do you approach. And the best way to approach is by somebody who I've worked with. Every VC responds best to people they've worked with. And it's not a big, it's not, it's not a big test to figure out who's in my network. Now in the day of LinkedIn and Facebook, that's the best way to come in or to meet at some of these things. But in general it's through a person we know. And then you ask about how do you know whether it's brain or gut. And I guess a story I forgot to tell and I'll tell this and we'll finish up is the reason I decided to join Mozilla is I got invited to a meeting with the founders at Yahoo where we were meeting Jerry Yang. And it was an hour long meeting and Jerry shows up 45 minutes late. We were kind of twiddling our thumbs with some of the people who worked for them. And he starts in 2005 and he starts to yell at us. Yell, yell, yell. Because he was so pissed that Yahoo users would download Firefox and become Google users. He was so angry. And before that meeting, I was kind of on the fence about whether to join Mozilla or not. But he was in the middle of, while he was yelling at us. Look, I don't know Jerry at all. I mean, he's, he yelled at me a couple times, but he's supposed to be a very, very nice guy. And I guess he probably bought one of these buildings or something. But it was while he was yelling at us. I said, well, if you can get a billionaire to yell at you, you're probably in a pretty good, you're probably nosing around in a pretty good space. So that's the key is like you're trying to figure out whether you love the product, whether you're going to get people to yell at you because it's a good big space and whether there's a bit of a passion of chemistry, like anything else. Okay, thank you very much.