Alfred Lin from Sequoia Capital | Advice for founders, future of consumer social, and more

One of the things we teach people is like, you need to have this big idea and that's great. What I think we don't teach people in the entrepreneur community is great companies have this great vision of the world that they paint. But once you're inside the company, what makes a great company is this duality of being able to paint this beautiful picture. You're not there yet, but you're also like able to see the facts and deal with the realities of the situation.

We are very lucky to have the one and only Alfred Lin from Sequoia here today. And Alfred is a. For those of you who don't know, if you do know, you know. But for those of you who don't know, Alfred's a legend in the Valley. He's been at Sequoia for a decade where he's been on the board of some of the most impactful companies like Airbnb, Doordash, Houzz D and co, many others, and before then was an established executive at companies like Zappos Tell Me and co founded Link Exchange back in the day. Alfred is not someone who does a ton of these sessions or he's not someone who tweets every day about all his insights. So we are really lucky to have him here and share some, some of his hard earned wisdom with us. Alfred, thanks for joining today.

Thank you, thanks for having me and thanks for tuning in wherever part of the world you're in today.

Awesome. So Alfred, by way of even further introduction, why don't you connect the dots a little bit and share. Maybe if you were to look back at the arc of your career and look at what threads it together, what are the threads that you've kept pulling or what ties it together, what, what's motivated some of it, what comes to mind for you. And by way of doing that, you could also describe some of your story in more detail.

Sure. I mean, I think the thread that pulls everything together is not being afraid of taking risks. And that started at a very fairly young age. I was born in Taiwan and my father worked for a bank that was trying to in Taiwan, that was trying to expand internationally. And he opened up a bunch of branches around the world. At some point he was flying back and forth and it didn't make much sense for the family. So at the age of six and we moved from Taiwan to New York, we moved from neighborhood to neighborhood to neighborhood throughout New York City because my parents said to me that we're temporarily poor but we know what we're doing. So anytime they had means they would move me to a better school district. The choice of where we moved to was the better school district. And then I was good at math and science, so I went to Stuyvesant High School, study math in college. And I had taken a class with Robert Merton who told me that if I wanted to work in the hedge fund industry, I wanted to price options and derivatives and things like that, that I should go get a PhD because that's where everything is moving. You should get a PhD in math or computer science or physics or economics. So I ended up working on a PhD in statistics. I decided I didn't love this stuff and I decided I wasn't all that interested in, in the hedge fund industry. And so I started looking at what was going on and the Internet was starting to just take off. In 1997, 98, I joined this company, Link Exchange, and 17 months later, after Sequoia invested, we sold the company to Microsoft for $265 million and was like, well, that's a racket. Whatever this whole V industry is, it must be just easy. And so Tony Hsieh and I left Link Exchange, left Microsoft and started a small angel investment fund. And back then $27 million was a big deal to have an angel fund of $27 million. And we started Venture Frogs, which is a seed fund and an incubator. And we incubated companies like Tell Me. We funded and incubated companies like Tell Me and Zappos and OpenTable. And so the fund was started in 1999. It was probably one of the worst times to start a fund. But it was, it still ended up being a 7 1/2 8x fund, net of fees and carry because we, we worked it, we made 27 investments during that time and we, you know, we lost, we lost our shirts on most of them. Like we just had some good winners in them. And we spent time at Tell Me and spent time at Zappos making sure that those companies would be successful. And the reason that was was because we raised the money. The angel fund that we raised were basically friends and family money from Lake Exchange. So we didn't want our friends and family to lose money. I think a lot of funds in 1999 just called me a coppa and said, you know, we won't have Great returns in 1999, but we'll move on to the next fund. And we didn't have that luxury. And so I think sometimes when you don't have the luxury of failing, you find your way to success. Which is what happened at Lake Exchange, which is what happened at Venture Frauds, which also happened at. Tell Me. And at Zappos.

What motivated you? You had your own fund, you had a great job at Zappos leadership position. What motivated you to. To join Sequoia?

Well, I've known the partnership at Sequoia for a long time, so Link Exchange was funded by Sequoia. Zappos was funded by Sequoia. I felt like Mike Moritz was one of my mentors. I didn't know what I was doing when I first joined Lake Exchange. I was given this opportunity to run finance and sort of had to step up. And I learned a lot from how Mike ran the board meeting. And so I've learned, sort of understood how Sequoia works. And the reason why I joined Sequoia has a lot to do with why I think Sequoia is unique. And it has a lot to do with the fact that we partner very early with companies. Lake exchange was a $2.75 million investment at the time. And now today I work with companies and we try to make seed. We tell founders that we are available and we're open for business, from idea to IPO and beyond. And when things go right, we can be an investor in every single round of your company, which was what happened at Airbnb. We missed the seed round at Doordash because I failed to dream and I passed. But we invested in every single round at Doordash. But I saw that play out as an entrepreneur, on the entrepreneur side with how Sequoia operated. And that's why I wanted to work at Sequoia. The other thing, it's quite lonely running your own fund, in a sense. And Tony was. He liked the concept of having a fund because it's money making, but he didn't love the job of meeting founders and thinking about the investment decision. He loved meeting founders. He just didn't think. He didn't love the sort of critical decision making of making a decision to make an investment and then working with that, with the portfolio and guiding the companies to success as much as meeting just the initial stages of meeting founders and making money off of a fund. And so he didn't want to create a fund too, per se. And I really like working as a team. And the thing that is great about operating is you think about team all day long. And the difference about Sequoia and many other firms is that we do make decisions as a team. We work as a team. If we make an investment, it's our investment. It's not my investment, it's not Roelof's investment, it's not Doug's investment, it's our investment. And we work and we try to have people around the table that are from all sorts of different work experiences and backgrounds. So when we look at a company, we can assess it from a 360 degree view. After we invest, we can help the company from a 360 degree view.

Yeah, that's helpful. Thanks for that background. Let's dive into some of the meat here. We have, you know, an audience of many people here are founders or soon to be founders. You've obviously been a founder and an executive and then worked with many founders. As an investor. What advice would you give to yourself a decade ago that you could share with our founders as they embark on their founder journey?

Well, I have lots of advice. I think if you're at the seed stage, it is about, it's about finding if you're going to start the company yourself, know that it's going to be a lonely road. I don't think there's anything wrong with being a sole founder. You just have to understand you're, you know, there's no one else to bounce ideas off of. I think it's the reason why people have co founders is because you want to make sure that whatever weaknesses that you have are plugged in. And so when you sort of look at a co founding team, think about what you're uniquely good at and what you need to bring to the table and hopefully a co founding team will help sort of put you at an advantage when you go fundraise, when you go think about product and product market fit, et cetera. I think from the seed series, a time frame it's all about product market fit. And I think founders don't think about whether they have founder market fit when they think about product market fit. Like why are you uniquely good at attacking a problem? And I think you can iterate yourself into founder market fit like many of the founders we work with, they live the problem themselves and they're like scratching their head, there's got to be a better solution. And they iterate themselves into founder market fit even though they don't have any experience in that industry. We love working with founders like that because they bring a unique perspective as an outsider, as a disruptor. Many of the disruptors in the consumer space are from people who are not from the industry, people who are in the enterprise space. You see more of the people who understand the problem deeply and know where the White space is the disruptors tend to be from the industry, but you can be in the industry, not from the industry and disrupt that industry. You just need to have a unique perspective into why that industry has gotten a problem wrong and there's a better solution for it. I think that many technical founders don't focus enough on storytelling. Don't forget that we as human beings have grown, has evolved through storytelling. We learn by passing on information through stories we read to our children, stories they learn language through stories where our heads are wired in a way to sort of receive stories in a much better way than, you know, sort of PowerPoint presentations. And so don't think about the, oh boy, I gotta focus on the story of the pitch. And don't think about fundraising as a pitch. Think about it as just telling your story. And you need to tell your story to investors, which fundraising is. As a founder, you're probably thinking that I hate this stuff. It's nerve wracking. What if I don't do a good job? Think of it as telling your story to an employee that you need to convince to join your company. Think of it as a, as a pitch to a business partner that you need to convince to work with you. And don't think of it, think of it as fundraising. And lastly, I think this is not something that founders think about in the early stage, but over time you need to have something unique. You need to have a unique product or service. That's probably the word that we use, the early stages. Eventually that uniqueness has to compound into an advantage that seems like a moat around your business. And why does your business have these moats over time? Is something that I would ask. And why does your company matter 10 years from now? Because if things go right, you're going to be working on this for a while. All the overnight successes that you hear about are five to 10 years in the making. And even, even if things don't go right, you're going to be working on it for a while because you get money, you're going to have to put your time and attention into making it successful. You raise a seed, it elevates. Like, okay, I got to get the company formed. You raise the A, I'm like, got it. I got to make sure this product works and we have customers. You raise the B like you're responsible for now anywhere from 20 to 50 or 60 people in the company, you're going to make it work. And so even failures are to me generally not failures because you learn from them, but also you have some responsibilities for being a founder and making sure the company at least is somewhat successful and park or if it's not parked in the right place for your employees?

Yeah, we at OnDeck are 68 people now, and so certainly appreciate and fill that responsibility as we've grown. I want to ask you the flip side of that question, Alfred, which is some people here are also somewhere in between things and not sure whether ready to take the leap and start a company or they might want to join a company. You've been called in TechCrunch to have the Midas touch, since every company you've worked for has been acquired. What's the secret sauce that a company should have for you to decide to jump on board or something generalizable that you'd recommend to others?

I don't think there's a secret sauce. I think it comes down to if you're starting something, I think you need to have a unique insight into what the world has gotten wrong and why you have a unique ability to solve that problem. If you're joining something, you should ask, like, does this company have that special sauce on, like, a special unique idea and special, unique insight into that? So many things can go wrong. Don't focus on the things that can go wrong. Focus on the things that can go right. And I think in some sense, the successful companies have really optimistic founders. The fail companies also have really optimistic founders. So then you ask the question. It's not about optimism. It's not about the vision or the dream. One of the things we teach people is like, you need to have this big idea, and that's great. What I think we don't teach people in the entrepreneur community is great companies have this great vision of the world that they paint, and they get you really, really excited about that, and everybody wants to join. But once you're inside the company, what makes a great company is this duality of being able to paint this beautiful picture. You're not there yet, but you're also, like, able to see the facts and deal with the sort of realities of the situation and still not get discouraged. But even if you just had these two things, it's not enough because people would have cognitive dissonance that you're like, in these two dualities and these two opposite polar worlds, you actually need people around you. And maybe it's one of the founders, maybe it's you as the primary founder, maybe it's an executive rehydrate you hire. You kind of have to take people through, like, what connects the dots between the realities of today and this future that you want to go to and you have to connect all the dots but the closer you are to reality, like the dots might have to be painted a little bit more clearly. The future dots, the future milestones could be broader brush, but you don't have credibility unless you have all three of those as a team.

Yeah, that's a great framework. Thanks for that. As mentioned, a lot of people here looking for the next thing, many of whom want to be founders, are going through the idea maze and thinking about what they want to spend, as we mentioned, in the next decade plus of their life on I'm curious if you have any advice for whether it's navigating the idea maze or just more thinking about your next idea or just more broadly. I think one thing founders don't appreciate about VCs is that because they have all this breadth, they get to analyze markets and think about opportunities in a very macro way. And so I'm curious whether it's idea maze and. Or just your thoughts on sectors that you as an investor are looking at right now or looking to make investments right now or in the next couple of years where you think founders should be if they're taking a tops down sort of macro view where they should be tinkering?

Yeah, I would say that there are very few companies that are found or started because they take a macro view and they sort of go top down. Partly because that doesn't get you to the problem that you're trying to solve as a startup. It's like the cloud business didn't. Everybody knew that the cloud business should exist, but it took an engineer saying I just want racks for myself to start there at aws. I mean, it's not like Google didn't know that more and more things are going to move to cloud. They actually have all of their stuff is in the cloud and they could dream about the future that way from a macro perspective. And so I generally discourage founders from thinking, oh, this is going to be, this is a hot space 10 years from now and therefore I want to jump in first of all, by the time we know that that's the case, it's generally a little too late. And if it's not too late, it's fine to be the second or third or the fourth if you have a unique insight. Google was not the first search engine. It was probably like number 20 something. Jordache was not the first company that was in food delivery. But if you have a unique insight like Doordash had Which is we're not going to focus on the cities, we're going to focus on the suburbs, we're going to focus on selection, we're going to focus on merchants. And you take a differentiated point of view and you have a reason why that differentiated point of view can win. That's actually way more valuable than a top down perspective that this is going to as a market that's to be disrupted. Ride sharing. I give another example. Ride sharing was not a new concept. We had ride sharing before Uber and some of it was long, long haul. Lyft before Lyft was Zimride. It was actually started before Uber and he was just not the right application. And we've had commute sort of ride sharing, getting across the bridge, the Bay Bridge for example, for a long time. It just wasn't a business. And so like you need a unique insight on how you're going to sort of win the space and what the unique insight was the frustration of calling a taxi all the time, but the GPS was going to allow you to track people and so you're relieved that you can see them coming versus wondering when are they going to get here? When are they going to get here? That unique insight doesn't come from a top down analysis that ride sharing should exist.

Yeah, no, totally hear that. Are you close enough to. Just because I know it's not your company specifically to the thumbtack founding story. My understanding is that they did some hybrid where it's just three or four MBA types looked at. So, oh, Amazon for services that'll be big, but then sort of figured out a wedge. Do you know how that happened?

Well, we've heard Mark. So Marco had to iterate him. He had this concept that services was going to be big and he had to iterate himself to the exact sort of business model into how Thumbtack would create, you know, sort of do you do local, do you do, do you have local network effects? Well, you don't because you don't use these services that often. Do you go national. Those kind of things did require a bit of analysis. But I think he had always wondered why the services marketplace didn't exist and that was what he was trying to disrupt. Another example is probably, you know, Amazon, Amazon that got started probably as a combination of Jeff Bezos being nerdy and loved books and wanted a better way of getting the books that he wanted. But he also, because he was a hedge fund manager, he worked at D.E. shaw. He saw the sort of the trends of the Internet and he wanted to create commerce on the Internet, which didn't happen at that time. And he was like, look, if we can get people to transact, this should be a very, very large, large business. So there's a combination of both. I don't tell founders, like, they should ignore it, but they shouldn't start. They should have a passion for the business and then see if that business problem that they're solving is going to be large enough. If you go down the path of, like, these are large markets, you're not going to necessarily find a business that you're passionate about. You're just going to find these are large markets.

Yeah. One thing you and Sicur are famous for sort of popularizing is the why now? And thinking about timing. And so a lot of people have their idea, but they're questioning about timing because to be too early is just as bad as being too late. And so I'm curious to go through maybe some examples, one that comes to mind. You're just looking at portfolios, Instacart and Doordash. When Sequoia had famously backed Web Fan a couple of decades earlier, that didn't work out. I'm curious what gave you the courage to make that bet in a space where there had been a lot of skeletons prior. And if there are any generalizable lessons from that or other examples on how people should think about timing for whether it's frontier sectors or sectors where companies haven't worked out prior, I would say.

That if it's frontier, then by definition it's a bit too early. And you, you be in a situation where you might be developing the technology and it needs to be sold as technology or licensed to some other way of commercializing it. If it's coming out of a university, it tends to be a little bit harder for venture investors or founders to have a point of view unless it takes five to 10 years to develop the technology. And by the time it's developed, you have a unique, proprietary sort of way of, of owning that space. And maybe an example of that would be like, lots of investing is gone on into CRISPR and MRNA vaccines, both of which seems more relevant today than ever before. But if it wasn't for Covid, I'm not sure MRNA would have been the big deal that it is today if it wasn't for some of the gene therapies that we've been able to deliver. Not sure CRISPR would be like exploding as much as it has today, but those are pretty unique. And in those situations, you can still sell the company for the technology that it's developed, you don't necessarily have to make it into a business quite yet. So you have multiple outs if you're a little early, if you're late, the. The problem is if you don't have a unique insight, you're just going to get crushed by all the competition around the table. So I'm not sure being too early or too late is the problem. You just need to have a unique point of view on how big of a company you can build and what's its value to someone else. If you're not going to build a sustainable business. On the why now? Question, it's both a question of how to the founder how much they thought about the advantages that they have. So if you don't know that you have all these tailwinds behind you, you're not going to take advantage of it. The why now? Question is like, okay, you have this concept, you have this idea, lots of people have thought of it before. What's going to carry you, what's going to help you. If you haven't thought about it, you're not going to take that advantage. And in much of venture capital, in much business, it's about, we obviously are trying to get lucky too, but we were trying to also take as much advantage as is available to us. On the webvan instacart example, I would say webvan, there was way fewer Internet penetration then. And the idea of it is not that it doesn't work back then it worked, but the expansion was probably too fast. Being too early back then wouldn't have killed it. They raised too much money, they built too many distribution centers and then at some point the music stopped and they couldn't raise any more money. And that's what killed them. If they had slowly built the business, you could survive a few decades and still be in a really, really good place. One of the advantages that people forget is that some of the best companies in the world are just capital are very capital efficient relative to their competition. And this is the sort of thing that is hard if you're in a hyper competitive space and all of your competition is raising a lot of money. Trying to build a business with very little capital is hard. You're going to get crushed. They're going to acquire more customers than you, they're going to be able to show more growth, they're going to be able to show more expansion and you won't have a growth story to tell. So it's a bit of relative gain. But the companies that survive and do extremely well are still, relative to the competition, much more capital, efficient. They do more with less. That doesn't mean that they didn't raise a lot of money themselves. They just did more with less capital. And I would say that about Airbnb, I would say that about DoorDash relative to their competition. That doesn't mean that neither of these companies, they, you know, they raised, you know, billions of dollars before they went public and they raised billions of dollars after they go public.

I want to go through a few different spaces with you because there are probably some fellows who are exploring some of those spaces to your perspective. So you're on the, you've invested in Reddit and I'm curious how you view that investment or more broadly where you see consumer social going and where you're excited as an investor. More broadly in consumer social, I think.

Consumer, it's a weird situation, right? Like for many, many years consumer social people looked at the US and they ripped it off and copied it around the world or our US Companies sort of expanded globally. I think in consumer social, I think we have an advantage as Sequoia of looking at what's going on in China and India. And I think consumer social will look more, it won't look the same, but there are a lot of things to learn from China today than there ever before. Short form video is one of those things that I think you could have seen that happen before we started doing short form video, whether it's on Snapchat or Instagram. TikTok has come to the United States and it's very, very popular gaming. Mobile gaming has, was probably pioneered in Asia much more than it was in the US and some of the sort of the things that we can see that they're exploring with AR VR is pretty interesting, like on mobile. So I think consumer social gaming is probably the next social sort of platform. We spend a lot of time on games. So that's probably my thoughts on consumer social. What other trends do you want to talk about?

Actually, we're getting some questions from the audience, so I one of them is related here. I want to ask Chris to hop up or unmute and ask your question.

Thanks, Eric. And thanks, Alfred. Yeah, my question was around the sharing economy. So most of the companies you've touched have worked with, have kind of pioneered the sharing economy. Right. Where do you think the sharing economy is heading next? We had kind of the.com trend of bringing businesses online, 2000 trends of digitally native businesses. Do you see kind of a similar theme happening market by market and why or why not? I think that the thing that I would say is that there's going to be innovation in the sharing economy. And I think what people are concerned about is that it's just going to be a derivative idea. It has to be a big enough idea. I don't think sharing wrenches ever made sense. I don't think you're ever going to get that to scale. And a wrench is cheap enough where all of us have one. It seems like a waste, but it's not something that is a big enough market where that's a high use case, where that is a big deal. I do think that there are aspects of the sharing economy that's going to apply to B2B that hasn't been applied yet. I think every single lab has a set of equipment. That equipment is underutilized, that equipment is very, very expensive. So B2B marketplaces seems to be a place where there's going to be a lot of innovation, where investors and fair that that seems to be going extremely well. But that's just an example of a B2B marketplace for wholesale specifically aimed at small medium sized businesses. We can see disruption in that across industries. And the sharing economy is more about creating a marketplace for things that are either underutilized or have high frequency. And I would just focus on lots of things that have high frequency or underutilized assets in the business world. That world has been under, penetrated and underdeveloped from a marketplace perspective. If you look again at consumer penetration of how we order and how we make purchases, we see this growing trend and tell 1 in E commerce still, B2B purchases are way less over E commerce than it is through invoicing and POs and contracts being sent back and forth. It is increasing with SaaS, people are signing up, up, et cetera. But you get to a certain scale and people are still trading contracts and you still have account managers. Some of that stuff is going to change.

Awesome. Thanks, Chris. Alfred Before On Deck was even really a company. I believe in 2016 we hosted a dinner together on the next big platforms and that was almost five years ago. I don't remember exactly the ones we discussed then, but I'm curious if we're doing the digital version of it now. Which ones you're most excited about or eager to spend time on? I could ask you about crypto or VR but I'm curious where your mind goes.

Yeah, there are clear tailwinds today that I think if you wanted to sort of think about them like next platforms. If you want to build on someone else's platform, it's. It's an interesting time because there are more natural monopolies today than ever before between the tech giants. Amazon, Google, Microsoft, Tencent, Alibaba. There are a lot of them around the world and they're both a lot of them and they're gaining power, but they're also fragmenting and losing power. You saw recently what happened with people moving from WhatsApp to Signal and Telegram. Sure. You saw all that this past weekend. And so I think it's going to be a quite interesting time because there's going to be more fragmentation. And fragmentation is good for founders because you don't want to be in a situation where there's. These tech giants just gained more and more power. One of the things that people forget is that when Microsoft went through their DOJ case, they were distracted. There was this huge powerhouse and they were distracted for a period of time. That allowed for a bunch of innovation and people stopped building on Microsoft. They started building on the Internet and doing other things. I think we have a similar opportunity today. Even though there are a lot of tech giants and clear trends, other clear trends, I think AR VR has. People keep talking about that as it's just coming, it's around the corner. I would probably put that into the same category as we're going to see a lot of innovation for a while. It's not going to really be that innovative until, you know, to me, it's like the cell phone to the mobile phone. Like until we had smartphones, mobile phones got better and better and better. And none of you are probably old enough to remember that, you know, people used to text with a sort of nine, with the normal sort of numeric keypad, and they had web browsers on these small little phones that, you know, you could hardly see any information. But mobile didn't really take off until we had the smartphone. And I think there's a similar thing with AR VR. If you're going to have to be completely tethered, it has to be like a sort of home theater environment that is really, really cool, or we have to wait for it to get small enough or we're not tethered to the desk. And, you know, that does take time. I'm still much more bullish on gaming as the next new form, new platform for social. And I think that there's some really powerful platforms there, whether it's Roblox or Minecraft or Discord. There's just, there's a lot going on in that space. And we, we saw a huge increase in all of those, sort of all of the usage after Covid.

Let's say those companies are already massive. Let's say that the trend accelerates even further than you predict what opportunities for new companies exist given that some of these are already massive?

Yeah, if you're worried about them being massive and they're competitive, they're going to crush you then. And in some sense being a founder is not the right job for you. All great companies are not deterred by these massive companies. You don't want to go head to head against Amazon or Microsoft or Google or Facebook, but they're probably doing some stuff that you aspire to do and you know how to do it better than they do. And I think the same is true with, with any of these large companies. It's not that they're already large, it's that they haven't gotten everything right. And I'm not a founder in that space, but I would think about, you know, how hard is it to like really create in Roblox? Is it going to be, Is there another way to make it easier? If we believe that Roblox and Minecraft have created this metaverse world, is there a better way to create a metaverse? Can we create an AR VR version of the metaverse that they're not working on today? So there are always opportunities.

There's good perspectives. We're getting some good audience questions, so I want to get them some time as well. Camilla, could you unmute and ask your question?

Sure. Hi, Alfred, Nice to meet you. My question is, what are your thoughts on building in public and not in stealth mode? And do you feel there is an advantage from a fundraising perspective? Well, I think, you know, there are advantages to both. I think if your idea is easy to copy or rip off, then you want to build in stealth. And if your idea is, your idea is already hard to explain and you want to show people progress, then you want to build in public. And the things that are hard sometimes is to show what's like perceived. There's the sort of real progress that are being made. You have to show that to, in a fundraising environment, you have to show that to the investor. What is the actual progress being made? And some of that has to do with telling the story right. And some of it has to do with really understanding what you're building and conveying that. And it can be conveyed in stealth and it can be conveyed in public. The consumer companies that we have worked with in the early days tend to want to build in stealth because the idea of it is not necessarily what is proprietary, it's how you put it all together. And my partner Roelof always have this line at Symphonies are judged by how they play the music as a team and how it comes together and why it's delightful versus hitting every single note. I think a lot of consumer businesses hit every single note and still is not a delightful game or a delightful sharing experience or delightful photo sharing sort of application. And you got to get those things kind of right. And as you're iterating, you want to get those right and be way more advanced than your competition before you start showing it in public.

Awesome. Thanks. Camila Ankit, could you unmute and ask your question? Yeah, thanks Eric. And Alfred, I want to ask what are your views on embedded financing for marketplaces and how do you see marketplaces differentiating their offerings going forward?

Well, it's funny that you asked that question because almost every single marketplace embeds payments and financing is just an extension of payments in some ways. Airbnb's ability to build the marketplace was that they connected the payments infrastructure from around the world. They take payments from one country and then send it to another country because the host and the guests are not in in different countries or in many cases in different countries. Maybe not today. But it's not that hard to embed financing if you have the payment rails because you're dealing with banks and you have to have you end up having to deal with a bunch of regulatory requirements like being, you know, like money laundering sort of requirements and no KYC requirements, et cetera, and compliance with regulators and getting money transmitter licenses. If you're already that far down the path, it's not that hard to add financing then now you can ask the question, why haven't a lot of these marketplaces done that? It's probably because they have too many things they have to work on that's core to their business. And so it's not that they haven't thought about it. It's like is it really going to lift? How much of a lift is it going to provide versus just working with a firm that just went public or afterpay or some other company. Awesome.

Jordan, could you ask your question? Alfred, thanks so much for being here and thanks Eric. I was curious if there are markets that you're not interested in. I'm building something in kind of the B2C martech space and I'm wondering if you see a founder with a particular idea and you're like, oh, not that market.

Well, I think that it's our job to not redline industries to do this job well, you got to dream and if you stop dreaming you should. I mean, might as well get out of the business. Business is hard, both being an investor and being a founder. Business is hard enough if you can't dream and we like dreaming with entrepreneurs. So there's no market that we are not interested in. There are markets that are harder to build businesses in today than others. But I don't think we Redline Industries. If you're going to compete against Amazon, I probably would tell you to do something different in E commerce. If you want to compete with them on the cloud side, probably a bit easier because there's so much more white space and it is about how you're going to compete. So if it's going to be a very competitive space, why are you going to be uniquely differentiated in your area? Yeah.

And to Alfred's point, if you just look at his portfolio on the Square website, you can see he's invested in a bunch of different categories. There doesn't seem to be a main concentration in one. It's really diverse.

We're trained at Sequoia to be generalists and we do have leanings. I lean towards consumer more than enterprise but I will do some enterprise companies. I will make some investments in robotics, I will do some stuff in Frontier. But it is, it's generally a mistake to redline industries. You're constantly being surprised in this business if you. Redline industries.

Yeah. And even to your E commerce point, it seems you have a couple of E commerce companies in Dallas, Kill and dnco. They're taking a different track. Is that a space you expect to make more bets in the future just as E commerce is growing or were there sort of one off, so to speak?

Yeah, I think that the E commerce has continued to surprise people. I think the question around E commerce is always around what are you going to do that's proprietary and customers are fickle. So staying on top of the trends and moving forward with the trends is a lot harder than most people tend to understand. The picks and shovels. Businesses are just done extremely well like Shopify, BigCommerce that they're just taking a little bit of the transaction along the way is a great business model. Stripe, Stripe, Square. All of those companies are riding the trend of E commerce and not even just E commerce but like just even local merchants moving online. You want to call it E Commerce. They were never really supposed to be E commerce merchants. But they're moving online too.

Yeah, that makes a lot of sense. Let's talk about regulated industries. I see you have a couple health care bets or I know you have a couple. I didn't see any education bets. I'm curious if that's a space you're less excited about. But yeah, what about those two spaces and maybe just regulated industries in general?

I think the healthcare industry require someone who understands how to get paid. There's a lot of innovation in healthcare and the question is, how do you get paid? And so we're investors in Garden and Natera and these diagnostic, really cutting edge. I'm going to take your blood and tell you whether you are pregnant, which has been done, but whether your baby is healthy or if there are any genetic diseases through the mother's blood is pretty cutting edge stuff. Or in Garden's case, you take blood and try to tell you whether you have free flowing cancer cells in your blood, which is going to be very, very minute. But they're trying to give a signal for early detections of cancer. Those technologies are really sophisticated and really cool. But in the early days it was very, very hard to get paid. And so many of these companies are in the healthcare space. They suffer from not knowing how to get paid. And a lot of the successful founders in this space just know how to get paid. And they may not build the best technology, but getting paid, in some ways it's the best form of financing. The best form of financing is a revenue model. It's the least dilutive. And so many of the companies in healthcare, they raise a lot of money because they don't know how to get paid. They build this great technology and then eventually they get paid. But if you can get paid on day one, it's great.

That makes a lot of sense. I want to ask Santiago, are you there or you ask your question?

Yes, I'm here.

Please ask a question.

Thank you. Yeah, I wanted to ask if you've seen any interesting trends in Latin America and specifically if the trends you've seen are something like extra Latin America, like plaid, or if it's more unique and specific to the actual region. And this might apply, you know, also to other emerging regions. Yeah, so we're investors in a few Latin America, Latin American companies such as Nubank and Rappi, there's a lot of companies that kind of in Latin America where they kind of take an idea that has worked somewhere else. Those are probably less interesting to us than an idea that sort of where the founder really understands what's broken about the system. So in Neubank's case, I think David Velez just kind of knew how broken the banking system was and he wanted to create a next generation bank knowing all the sort of things that were wrong about it. I think there are lots of opportunities like that. I don't spend a lot of time in Latin America but thinking about uniquely where the disruptions are going to be tends to be around problems that are disproportionately bad in that sort of economy. Banks that sort of hold money and make it very, very hard for you to sort of get loans or get credit cards. Those problems exist in Latin America and nubank is making it a lot easier in that part of the world. And then there are, you know, there's almost every single sort of business that I've worked in the US There's a copy of it in Latin America. The problem with those kind of companies is that they tend to have lots of competition. And then again, not that you should shy away from competition. You just need to know what you're uniquely, how you're uniquely going to win and what's your unique strategy in that space.

Vitushan, can you unmute and ask your question? Yeah, I just wanted to kind of get more of your thoughts on it. Kind of briefly talked about healthcare, but just kind of get more of your thoughts on like how to get paid in education. If they see similarities between education and healthcare.

Yeah. And again education is a space where I think there's huge opportunities and I think the more I think parents today know how hard it is to educate their children because they, they're at home and they realize how hard it is to teach and how hard it is to, to keep children's attention. Whether it's over zoom or in the classroom, we're much more aware of it. I'm more aware of it because I have a 10 year old and seeing him go through partial amounts of hybrid learning and now he's back at sort of physical school. There's opportunities, I think the opportunities of figuring out how to get paid is, is going to be, going to be again an interesting sort of question. Secondarily, I do think there's lots of opportunity to do things in education that hasn't been done before. It's not going to necessarily be about content because the content exists. Making the content digestible has always been the problem in education. Like most of us just don't want to crack open a physics textbook or math textbooks. Some of the stuff that's presented is just not in the way that we've learned over the years to do a bunch of things well in different industries, and we have not applied that to education. And so I encourage people who want to disrupt education to think about that. And it's not gamifying education. It's. It is really about, like, thinking about what's the best way for people to learn. And I don't have a particular, like, thesis around it, but I think education companies that do well will have a unique answer to that. Have a great day. Have a great rest of your week, and thank you for having me on and listening to me for the past hour, and I wish you all the best of luck in your entrepreneurial journey.