#47, Randy Komisar, Entrepreneur and Investor — Lessons learned from a professional gambler, the ...

Welcome to From Startup to Grownup, the podcast. My name is Alisa Cohn. I'm an executive coach, an angel investor, and the author of From Startup to Grownup. Each week I talk to founders, creators, advisors, investors, and builders of all kinds about their insights and experiences in going from startup to grownup. Welcome back to From Startup to Grownup, and today I have an Incredibly special podcast. Today I'm interviewing the legendary Randy Komisar, entrepreneur, investor at Kleiner Perkins, and mentor to so many founders over the years. Now, a little background. I met Randy in about 2018 and we had coffee in his office away from home in Portola Valley, California. We kept in touch over the years and Randy graciously agreed to write the foreword to my book, From Startup to Grownup. He actually reads it himself on the Audible version, which you can check out if you like. So it was really a joy to host Randy, and this conversation was a really special one and distinctive because we just started talking. I hit record and we were off and running. No intro, nothing. We just get into it. And Randy tells the story of how he interviewed Neil Young and turned a disastrous conversation into a great one. It's a fabulous story. And then we sort of circled back. We covered Randy's background. His father was a salesman and a professional gambler. So Randy learned a lot from him, as you can imagine, especially how to read people, which stood him in good stead for his entire career and especially as an investor. We talked about Randy's windy and improbable career, the importance of luck in your career, and also about how you can create the conditions to increase the surface area of serendipity. We also talked about Randy's really special relationship with the very famous coach of Silicon Valley, Bill Campbell. Bill had coached an entire generation of founders like Larry Page, Sergey Brin, Steve Jobs, and of course, Randy Komasar. And then Randy and I got into what he looks for in entrepreneurs and the pivotal question he always asks them to assess what they're made of. And finally, Randy and I got into our core disagreement about whether or not founders should be the CEO of their companies as they grow. Listen to it for yourself and decide what you think. This is an amazing episode. Randy's so wise and he's an incomparable storyteller, so you're gonna love it. Please enjoy my fabulous conversation with the one and only Randy Komisar. Okay, you were telling me about Neil Young. We were interviewing Neil Young.

I was telling you about interviewing and throwing away the script. So I was invited to interview Neil Young in front of several hundred people under this beautiful circus tent on the, on the docks in Nantucket for a conference. And I've always been a Neil Young fan. And so I kind of knew his history inside and out. And I prepared like crazy to make sure that I had an intelligent— excuse me— intelligent conversation with Neil. And he has a reputation for being a very difficult person to interview. He just doesn't have much He's not a team player as an interviewer. So I, I, we get up on stage that night, shake hands. We have these two stools. We sit face each other. And I figure I have an hour, hour and 15 minutes with him on stage while people are eating their dinners. Maybe if I had 10 questions and ask good 10 or 15 follow-up questions, we'll get through. Maybe have the group ask some Q&A as well. Everything be great. So I get up and I ask my first question and his answer is yes. No follow-up question. So I go to my second question and his answer is no. Now I'm through 20% of my questions. It has taken me 15 seconds and I have an hour and 15 minutes that I've got to fill. I am sweating up there. I am sweating. I'm thinking, this is going to be a disaster. What I did was I got up, I got 2 beers. I gave him a beer, I took a beer, and I moved my stool so that I was within kissing distance of Neil Young. I took my script and I threw it down. And I asked just a general question I knew he had to give me a general answer to. And I just started going through that windy journey, following his mind and having him engage and seeing where he engaged and didn't. And it was the most fascinating conversation because it was so loopy and it was everywhere. And yet there were these points that people came away with that I think you couldn't have gotten to in another interview, and that was because I threw away the script and I just followed my interviewee where they were going. And I followed— I could see where he lit up and I would go through wherever he lit up. I'd go right through there for 5, 10 minutes at a time. And I had a good time. He gave me a hug at the end. He had a good time. It was great. It was great. But it was almost a complete disaster.

What a triumph. And I can only imagine how stressful that was.

Oh my God.

Your big moment with your big hero. But I'm just curious, Randy, like, have you always been able to kind of read a moment or a situation like that and read people like that?

You know, I'm a pretty good people reader. I mean, I'm— I don't wanna flatter myself because I'm bad at so many things, but this is one thing that I think has distinguished me. And I think in part is, I know I grew up, I grew up with a bunch of street sense. I mean, my father is a professional gambler and so there was a real unusual kind of upbringing with him and watching the way that He navigated people and the world. And when I was a youngster, I was a bit of a troublemaker, you know, I— and so I probably knew more about the street than I should have given the rest of my academic, you know, resume. And so I've always been pretty comfortable reading the person across the table. That's not to say that I'm infallible at it at all, but it's one of the things I think I do pretty well.

That's amazing. Wait, I've got to double-click on your father being a professional gambler. Wait, what? And also, can you— like, is there a moment that comes to mind? Or like, when you say he navigated the world in a certain way, like, what do you mean by that? Like, what What are some images you can share to give life to that?

Well, so we grew up in upstate New York. At the time I was growing up, Las Vegas was the only legal place to gamble in the United States, but there were lots of card rooms and my father was a poker player. And he would sell, by day he would sell things, anything that could be sold, you know, he would sell whether it was cars or dried fish, paint or jewelry. Right? But, but he really made his living and his passion was for gambling. And as gambling opened up in the United States, first in Atlantic City, after Las Vegas, and later at the Indian casinos, he was one of the first card counters out there. So he would play blackjack and was a card counter before card counting became a recognized problem in the casino business and before card counters were excluded from the tables. But so I would spend time as a kid. So whenever we were, you know, on a vacation at a casino, I would— quote unquote vacation— I would spend time looking over his shoulder and It taught me a couple of things. Number one, it taught me that I'm not a gambler. I hate losing. And the— and one of the more interesting things I learned from my father sitting around the table in the mornings with all of his cronies after a night of gambling and listening to their stories as we, you know, ate danishes and drank coffee was almost all the stories were about losing, not about winning. The machismo was all about the guy who could lose a couple hundred thousand dollars or $1 million in a night. It was never about the person who eked out, you know, you know, a new car or some— or a new home for their kids. That was never the story. So it was a very interesting mental picture of what gambling— the gambling mentality was. But because my father was both a great salesman and great bluffer, as he was, He was able to sort of understand where somebody's particular weakness was and play that, play that as a salesman, play that as a poker player. And I, and I, and I observed that it was not my instinct to do it in those contexts, but I sort of, I guess maybe by watching it enough or maybe part of it's hereditary, I was able to see some of the same things. And that's informed how I interact with people and how I practice venture capital.

Yeah. In what way? How, how did it inform the way you've practiced venture capital?

Well, one of the things that, that I was sort of known for at Kleiner Perkins was being able to assess whether or not the person across the table was a liar. Or not. Wow. Right. And there's a difference, of course, in venture capital between being a liar and being an exaggerator. You know, the fake it till you make it, you know, and if you cross the line like an Elizabeth Holmes, you end up, you know, paying the price. But so much of Silicon Valley is a bunch of optimists who are exaggerating the future, not with a sense of deceiving you, but with an idea that they're informing you about what these opportunities look like. And so it's a fine line in determining whether somebody is lying or exaggerating. But, you know, in a handful of times when there were actual people lying to us in the room, I was pretty uncanny in being able to point out to people afterwards that that person was lying. And we actually invested in one or more of those against— over my objection, and they turned out to be lying.

Mm-hmm. Mm-hmm. Can you— could you— if you think about that, just like if you take a breath and you think about some of the, you know, the liars I have known, what comes to mind as a tell? Because another thing about a professional gambler is that they, you know, they have tells. And so you probably learned a little bit about that from your dad. What tells do liars have?

Well, I think it's, you know, it's individual, right? Each individual has a different tell, something that will come up when the question is asked over and over again in different ways, right? So it's— there's a, there's a consistency to an, to an anxious or nervous response that I think is a tell. But more importantly, I think more, even more generally, more, more simply, when somebody is ignoring the, the questions in order to restate the facts of the case over and over and over again, that's a tell, right? The fact that there's not— they're not interacting with the question. They're deflecting the question because the question is uncomfortable right now. Sometimes the question's a problem for them because they can't answer it. And, and but that's about coming back at it from different angles until there's a place where they can answer it. But if you can't find that angle in the conversation and they're just deflecting and bombarding you with the same narrative over and over again, that should make you suspicious. Yeah.

Yeah. Also, I would just add, when I talk to somebody and they can't come up with specifics. Yeah. So it's like, well, how did you approach that kind of thing? You know, and they sort of, you know, general, general, and you keep asking them to drill down and they're just not able or willing. I always think one way or the other, this is just not the full truth.

That is so good. And I think the challenge there is, are they exaggerating? Are they lying? Because I run into that problem with very, very bright entrepreneurs who can rationalize a deficiency or even inconsistency in their own minds and then tell it to you as a truth. Because once it's rationalized in their mind, it is their truth. The tell becomes harder when they believe it. The tell is much harder. A liar is somebody who tells you something they don't believe. A deluded person is somebody who tells you something they do believe, which is false. Right. And those are two very different interactions. Yeah. And so I find, particularly in a place like Silicon Valley, people know how to mouth the words and they actually think they understand the words. And those words can be about leadership, those words can be about business models, those words can be about products. But they understand this vocabulary. They think they actually are communicating a truth to you in that vocabulary, but they don't know what the words mean. They don't really understand what the words mean. They've just mastered the vocabulary.

Yeah, I think that's so powerful. And I— it also makes me think about the idea of lying, like lying to yourself, right? So we're all kind of easily— we easily delude ourselves when we need to and want to. And as a coach, my stock and trade is self-awareness, right? So the thing I'm interested in exquisitely is someone's self-awareness. And what I notice is that when someone says to me, I'm very self-aware, I think, oh, okay, maybe, maybe. And then every time they tell me that, what I have increasing evidence that they may be a lot of things but not self-aware. Right.

So, so, but I, I find that, you know, in Buddhism there's this notion that the that the most fundamental challenge that you need to get over is the notion of delusion. Because if you are deluded, there's nothing you can do that's going to resolve your suffering and is going to alleviate your problems. You have to be self-aware enough to understand your own delusions and to escape them, at least momentarily, to be able to deal with them.

Totally, totally true. And be able to face them with clear eyes.

Yes, yes, yes. You know, and when I think about what you do as a coach, which I think what you do is actually more than a coach because it's so personal. But I think about what you do. It reminds me of the Buddhist parable of, you know, taking the mirror and focusing it on the person in front of you and making them see themselves.

Yeah, that is so well said. And I totally agree that that is such a critical part of coaching and certainly the work that I do. Now, Randy, we jumped into this conversation and I love it. This is like, I love it. And I will, of course, introduce you in the intro that I have, but I wanna kind of come back to a little bit of a chronology, a tiny bit of a chronology because You have, you've so such a rich career, rich career with such a tapestry. And I guess now I really have to ask you, how did somebody who grew up with a professional gambler as a father make his way to Brown University and then ultimately become a lawyer? Is there anything more straight-laced than that? This is all before you were at Kleider Perkins.

Yeah, yeah, yeah, yeah, yeah. Well, I am fond of saying that my, career only makes sense in the rearview mirror. I mean, it was a— and, and there's some wisdom in that, that I've— I think hard-fought wisdom in the sense that you don't really ever know where you're going. You can only set the direction, you can set the course, but you can't set the objective. And I do think that life turns out to be a bunch of individual decisions that add up ultimately to a career, a family, whatever. And it's the quality of those individual decisions that determines the quality of the outcome, not some grand objective and some grand plan to get there. Right. So you grew up sort of, you know, middle class, you know, as middle class is sometimes the ups and downs of gambling, will get you in upstate New York. I did reasonably well in school, but, but I don't think there was any anticipation that I would go to a, you know, Brown University. I, I, my guidance counselors, I think, thought I was too much of a handful to get into a great university. And my parents had never been to university. So I was the first one in my family to go to university. And I didn't have a lot of guidance in getting there. And so I ended up really first at William Mary, largely because they took me, right?

Yeah. I was going to say also, also a good school. Just—

yeah, yeah. Good, good school.

I stumbled into the college, William Mary. I don't think so.

Yeah, I was very pleased. I was very pleased when they took me. I— it didn't suit me. It was a very straight, straight-laced place, but But I got into college and, and, and my sense going through college is I really didn't know what I was going to do on the other side. I thought it was going to— I was incorporating enough of my father's values and goals into my own at that point, you know, in your early 20s, late teens, that I just expected I'd do something in business. My father had always felt like being a lawyer was a a good trade to have, in large part because he was always having to deal with lawyers. And, uh, and, and I came from a family where the idea of a lawyer was a license to steal, literally. I mean, that's how they used to— lawyers have a license to steal, you know, sort of the, uh, the, the Trumpian notion of a lawyer. Um, but, you know, it was this perverted notion of a lawyer. So I had that in the back of my mind. Um, I transferred to Brown and sort of found myself in paradise because Brown was a place where, you know, you had to work hard to get into, but they didn't tell you how to get out. It was the most creative place you could imagine. You had to— you had to find your own path. You had to bushwhack your way out of Brown, right? In those days, you could take every course, you know, for— for without grades. Majors were— I think they existed, but I wasn't actually sure how they worked. We could gather as students and teach ourselves and get course credit for that. It was this utopian sort of place from an educational standpoint. And what I got most from Brown, in addition to meeting great people, was a sense that of, of how to engage my curiosity in lifelong learning. Right. What I learned at Brown was how to learn and That has served me much better than any amount of knowledge that I might have been able to obtain in any number of courses while I was there. And so that, that has served me well because I'm a curious guy. And so I follow this winding path. And when I graduated from Brown, I worked with a small group of, of rock promoters, you know, so we did concerts on the East Coast, mostly college festivals. I helped run a community development program for the city of Providence. So, and I was a manager at 23, which was astounding because I didn't— couldn't manage myself. Right. And I taught economics at a small— at a small cooking school called Johnson and Wales. Johnson Wales had an evening course teaching Vietnam vets, getting Vietnam vets back into the university., and I taught economics to Vietnam, to returning Vietnam vets. That's what I did in the evening. So those are the 3 things I did. I was juggling tons of energy. You know, I'd wake up in the morning and I'd put on a suit and tie and I'd go downtown and I work in the mayor's office. And then I take off the tie and I'd unbutton my collar and I'd go to the, to Johnson Wales and I teach economics. And then I'd take off the jacket and I'd put on some jeans and I'd go out to the clubs in, in work the music scene. So that was kind of how I spent my misbegotten youth. Of course, going nowhere in particular, right? I was just doing all this stuff and going nowhere. And then one day when I'm walking the streets of Providence, a very important man named Dean Hazleton, who I had taken a couple courses with and he's just beloved at Brown University. He, uh, he were walking down the street and he said, uh, hey Randy, what are you doing? And I said, well, you know, I'm doing this, I'm doing that, I'm doing this. And he goes, have you thought about law school? And of course I'm thinking about my father and, you know, License to Steal and all this other stuff and law school. And he goes, if you want to go to law school, I'll write your, I'll write your reference. Really?

Yeah.

And so I went home and got a— I went to the bookstore and I bought one of those, you know, study for the LSATs. And I went home and I took a practice exam. I did okay. So I thought, oh, what the heck? And so I applied to law schools and I got into Harvard. You know, who would've thought, right? Who would've thought? And I thought, by the way, at that point I'd be a lawyer and be in the music business. I thought I'd come out and be in the music business as a lawyer, as an agent, or whatever. And yeah, that's what I thought I would do.

Good plan. Good plan at that point. But I just want to highlight for everybody, for you, for everybody listening, the power of that moment of serendipity or that random moment where someone says something to you that unlocks something. And I think it's so significant to realize that, like, You might be the, the sub, the, the object of that, but you could also be the person who can unlock something for someone by seeing potential or seeing a possibility that they don't see in themselves. And say, and he did that for you.

I love that. I love that. So I'm going to tell you a little piece of story I skipped over because it will let you understand how important that really was. So Dean Hazleton, beloved at Brown, but I don't know anything about Brown. I'm transferring to Brown. I've been partying all night. I get in my car at 2 in the morning. I'm going to drive to Brown because I have to register the next day, right? So I get in the car and I drive down to Providence and I'm, you know, hungover and I'm asleep and I find a parking space near the provost's office and I got to go in and register, right? So I can go back to find my dorm room and go to sleep. So I get out of the car, I get out of the car and I shut my door and I'm walking down towards the provost's office and this guy walks by. I've never seen him before in my life. And he goes, "Hi, Randy. Really glad that you're able to join us at Brown." I don't know who this guy is. I've never seen him before. I've never been— I've been to Brown once and it was for a drunken night, you know, a year before when I was looking for universities to transfer to. And so that's Dean Hazeltine. Dean Hazeltine makes that connection. He touches my heart at that moment. And from then on in, when he hits me 6 years later— no, 5 years later, 5 years later— with that comment, it touches me again because of his consideration for me the day that I first met him.

Yeah. The power of that, of that consideration, of that relationship, of that genuine caring. It's so meaningful. And I guess it just leads me to now kind of maybe go to another core relationship I know is so important to you. So you became a lawyer. God help you. You stumbled your way through the Ivy League. You became a lawyer. You went to Apple, and at Apple you did your work. And at Apple you met who would become legendary coach Bill Campbell. So talk about how you met Bill Campbell and how his impact has really shaped your career.

Bill Campbell, I can't say enough about him. I mean, if next to my computer is always a picture of Bill's in my office, always, because, because the, because those of us who we're disciples of Bill always learn to ask this question of ourselves, which is, what would Bill have done? What would Bill have done? Whenever you're in a difficult situation, what would Bill have done? And so I always have Bill right there. Now, as a— I want to finish that thought before I go back to meeting Bill. What you're really asking yourself after spending decades— I spent 4 decades, I think, with Bill. What you're really asking yourself is, What would your best self do? What would your best— because Bill brought your best self out. So you'd be asking, you're saying to yourself, well, what would Bill do? Not what you're really saying is what in my heart is really the right thing to do? Because that's what Bill elicited from us. So I'm at Apple and I'm at that point, I'm senior counsel. I'm sort of responsible for the legal part of half of the company, but not the sales and marketing side, which is what Bill is running. And so Bill and I don't really know each other very well. We're— we run into each other in a couple of meetings and usually Bill being a great sales and marketing guy, he wants to do something that I need to rein in. And so there's this debate and you really don't debate with Bill because Bill is an over was an overpowering, you know, personality. But nevertheless, you know, I would nibble at him to try to get— to try to get to the right answers. So I had no— I had no relationship with Bill. I mean, other than those interactions. One day I— and Apple is maturing and they're thinking about building a real professional general counsel's office. And frankly, I come to Apple to leave the law, not to get more involved in law. So I'm thinking about leaving and blah, blah, blah, blah, blah. Blah, blah. And so I'm sitting around my office one day, and, you know, Bill comes charging through like a tank, like he always does. It's running that— we're running down the hall. And you mean, you can always tell when Bill's in the building because, you know, there's a wind that is sort of in the building. Anyway, he grabs me. He's like, I gotta talk to you. I gotta talk to you right now. And that's okay, Bill. Great. What I mean, I'm figuring some legal issue or I've done something wrong or whatever pulls me into this office. And I get metaphorically, it's, it's great because it's a dark office and he doesn't turn the lights on. So I'm sitting in the dark with Bill and Bill turns to me and goes, well, tomorrow Apple's going to announce that they're spinning out the software company and I'm going to run it and I need a co-founder. And I want to know if you want to co-found it with me. And I'm like, and I'm looking, I'm trying to figure out what just happened here. I don't really know this guy. Why am I the first person he's talking to? And, and, you know, and, and what is this job? And he says, and then he turns around in a Bill way and he goes, I kind enough to know right now. Now, mind you, he hasn't told me the job, the title. He hasn't told me anything about comp, obviously nothing, nothing. He's just said, do I want to join him on an adventure? And best decision I ever made in my life. I turned around and without hesitation said, yeah. And that started a relationship that was so important to me. And I think that's really important to Bill. I mean, Bill and I, we did— we, we founded Clarus together with with several other people, all became co-founders. That was Bill's way of building a team. We then did Go Corporation together, which, which failed as a company, but I— but where I learned a ton about leadership and, and, and talent development. But after that, we continued to work together on projects or personally for decades. And we— if we didn't have a reason to meet sometime during the course of the month, then we would get together for coffee every month regardless. So we did projects together, we did Nest together, we did a number of other projects together. I worked out of his office for a while when he had moved his Intuit office into a separate chairman's office. He was very, very important to me, and I learned a ton from him about leadership and to develop people.

Yeah, I definitely want to explore more about that, but I also just want to sort of realize I didn't quite lay the context of who Bill Campbell was. Again, legendary coach. And Randy, this is about you, but I'd like to take a little turn into how did Bill, from like doing, I don't know, sales and marketing at Apple and then founding Clarus with you and then founding Go with you, How did he become the coach to, you know, Sergey and Larry and Steve Jobs? And, you know, he was the coach in that Twitter book, you know. Yes, right. Yeah, you know, all these, you know, all these sort of things. And of course, he was the subject of the book Trillion Dollar Coach. And, you know, his mystique has only really grown since his passing. But can you sort of explain how he even got to be, I don't know, a coach and to be such a part of Silicon Valley in those days?

Well, I mean, the short answer is it comes down to character. But, but let me tell you about that character. So he grew up in a hardscrabble town of Homestead, Pennsylvania, outside of Pittsburgh, which was a dying coal town. And his father, I think, was the principal of the high school. And he and his brother were star athletes. He was a very— I wouldn't call it integrated, but certainly mixed community because there were a lot of, of, of Afro-Americans who lived there and worked in those coalfields as well. And, and a lot of poor white people. And it was very much a lower blue, you know, lower middle class blue collar community. So that, that, that was Bill's kind of hardscrabble both athlete and, and, and, and small town, small dying town kid. He got himself into Columbia. His brother got himself into the— I believe it was Annapolis. And, and his brother, you know, according to Bill, was really the star. His brother was a better athlete. He was a better leader. He was, you know, he was a hero. And, and Bill thinks about— always thought about himself as actually just being in his brother's shadow in a really nice way because he loved his brother dearly, was devoted to him. But Bill ended up at Columbia, kind of the way I probably ended up at Brown, you know, kind of with a bit of luck and a lot of hard work. And he, and he was a star athlete at the football team at Columbia. And, you know, a bit like me, I guess, you know, he graduated and decided to follow his passion, which was football, and became a football coach. And he was at BU or Boston College. Excuse me, he was at Boston College. He was a football coach. And, and then at Columbia. And, and, you know, in the story, the little joke he always told, and Bill would repeat his jokes until you could, you know, repeat them in your own mind faster than he could say them. Because he would just say the same thing over and over again. That was Bill. He was very quaint. But Bill, one of the things you'd always say was, people want to know why I'm, you know, why I went into business. They should have seen my record as a football coach, right? He had a terrible record. Terrible, terrible football coach. But, you know, he charmed an executive at J. Walter Thompson who brought him in to learn the advertising business. He then charmed one of his clients, Kodak, to become an executive in marketing in Rochester, New York. And then he charmed John Sculley to bring him from there into Apple. Now, what I think, Bill was exceptional in so many ways, but he was particularly exceptional in a place like Silicon Valley that was full of nerds that didn't have the character, the grit of growing up on the streets of Homestead and being a star athlete and understanding teams and leadership. And so I'm not, I'm not saying that he had a— that he would not have been successful elsewhere, but he was particularly successful in Silicon Valley. Because people like Jobs and Sergey and Larry, they'd never seen anybody like this. I mean, these are the nerds in the back room who are, you know, not part of that world. And suddenly they're seeing somebody with the strength of character, the determination, the devotion and dedication that those of us that have actually played sports have seen in our coaches. They're seeing it from this guy and they're seeing it in a very special way. But nevertheless, they're seeing it from this guy. So most of the people he really touched were people who had never been exposed to somebody like him. Right. And with Bill, they were being exposed to the best of the best in that regard. And Trillion Dollar Coach, the book that was written about him, you know, I've— I must say, I've objected to that book so many times because Bill would have hated that book. The idea that the title of that book alone would have nauseated him. I mean, he never wanted to be known for his money or his resources. He wanted to be known for his character, for his caring, for his relationships. And I, you know, I can go on and on and on. But, but, but Bill was a very special person to those of us who had the privilege of being, of having sort of an intimate relationship with him through the critical parts of our careers.

Yeah, that's beautiful. By the way, when you talk about that in terms of having a picture of him and, you know, sort of what would Bill do, I guess I would just say that, you know, I feel that way about Marshall Goldsmith.

Oh, yeah.

I met 17 years ago and has become a dear, dear friend and a mentor. And his picture isn't here. Oh, that's a good idea. But I just appreciate so much what he gave to me and how he at least, you know, still continues to give to me and shows me the way for me and so many others. So I think it's very powerful to have a figure in your life that you can, frankly, that in some ways you're absolutely right, the activating your best self. And it's very helpful sometimes to have someone who kind of, I call Marshall my muse, you know, like click, what would Marshall do? Or click, my best self gets activated. And I think that's really helpful.

Yeah, become shorthand for that. I mean, I think a great coach, that's, yeah, you may become the avatar for your best, for the other person's best self, but it's really about bringing out that other person's best self. That's what a great coach does, right? They bring out your potential.

Totally. So from all of those entrepreneurial experiences and the different businesses you ran, you ultimately became an investor, a partner at Kleiner Perkins. I think you were there for, you've been there for 12 years. I actually don't even know if you're still there. Like, oh God.

Well, neither do I. You know, so I joined in 2005, so it's 18 years. And the reality is that I have not been doing any new investments there for, you know, several funds now, probably 5 or 6 years. But the way venture capital firms work is it's a series of different funds that you're partners in. And I'm still partners in a couple of funds that have not yet been liquidated. So I still have work to do. On those companies and with the firm. And so I'm still very associated with them in that regard. I just haven't been making new investments with them. I see.

Okay, that's helpful. Well, so I'm curious. So then you became— I mean, I am certainly curious why you decided to become a venture investor. But then also, if we sort of circle, continue to circle back to leadership, like, how do you think those experiences formed you as a leader and how did you think about that when you were choosing and thinking about which entrepreneurs to invest in?

So I'm going to break that up. Let me— let me— because those are two questions that could take us the rest of the interview. But, but the first one. So let me talk about how I came to Kleiner Perkins. So I— after I co-founded Clarus with Bill and then I was his sort of right-hand person, COO, whatever you want to call it, CFO at Go Corporation, which we then sold. I went off to be the CEO of LucasArts Entertainment. So I ran LucasArts Entertainment for a bit, and then I ran a Kleiner Perkins company called Crystal Dynamics in the gaming business. So I moved from being a lawyer to being a corporate development person to being a CFO, COO, to being a CEO. Right. Sort of. And Bill was very instrumental in that. I would say, you know, like my father intended me to be a, you know, a rough-and-tumble business guy. I think Bill always intended for me to be a CEO leader. Right. And so you kind of follow that path because they're plowing that path for you. So you follow it for a while. But I will tell you, by the time I left Crystal Dynamics, I was convinced I didn't want to be a CEO. I loved being second to Bill Campbell. I loved it. It gave me purpose. I had a very hard time finding purpose as a CEO because, you know, frankly, making a lot of money wasn't a purpose for me. And the companies that I was running were companies I founded. They were companies that other people had founded, so they weren't necessarily my passion. I was coming in as a professional leader trying to perfect my leadership, but I had difficulty finding my own muse in those businesses. And I had to wrestle with the idea that, that there could be a really productive, successful, satisfying life that where I wasn't the CEO. Right. And, and that took some self-awareness, frankly. To get there because— and my coach didn't believe that was the right answer for me. Right. So my coach, Bill Campbell, didn't— you know, he, he wasn't— we didn't want to accept that. When I left Crystal Dynamics, I didn't know what I was going to do next. You know, I was getting CEO offers again. I didn't want to be a CEO. It seemed like it was the easiest thing to do. Easiest thing to do is just, okay, I'll be a CEO.

Fine.

I'll go do it again. But I decided, you know, I sat back to your point of, of self-knowledge, sat back and said, what do I really love about what I do? I love innovation. I love creativity. I love developing talent. Okay. What don't I love about what I do? I don't love the day-to-day, you know, HR issues. I don't love the day-to-day nickel-and-dime finance issues. I don't love the sort of, you know, grinding through a plan issue. I don't like the marching part. I like the dancing part. Right? Right. And so— and I was realistic. You know, marching comes with dancing, right? In every CEO job, marching comes with dancing. So I said, what if I just created a dancing job? Right? And I— and I started to work with a couple of companies. One was— first one was WebTV with a guy named Steve Perlman. Brilliant young entrepreneur in the Valley. I'd met him at Apple. And I found a role where I was his— think about me as an avuncular role. So I would bring my experience and my contacts to him, but let him continue to run the company. I'd be there with him a few times, a few days of the week, not all the time, always available to him. And by and large, what I was teaching myself in that time period was how to manage through the development of others. So if I give up the hard control, how do I manage and influence with soft control? But how do I accomplish two things at once? The success of the business and the success of the person together. Now, you know, if you're a venture capitalist, by and large, you always say you're invested in both. But when push comes to shove, you know where your heart lies, which is it's the business, not the person. I didn't want that to be, that wasn't my ethos. So, I became what became— what was coined in the Valley. And later a case study was written on this by Harvard Business School because they found it unusual and interesting model, which was a virtual CEO. And so I would do a portfolio of companies and I would always be changing them around, usually spend a year or two until they either proved themselves out and had operating management or they didn't and they disappeared. And I would spend a day or so a week with each one of them. You know, spread over the course of the week, helping their founders and their talent grow into the roles of being able to lead that business while helping them make decisions about what was best for the business. That's what I did. And I did that for about 12 years, I guess it was. Maybe, no, yeah, about 12 years. And I loved that job. I loved it. I didn't work the, you know, there were certain things I learned along the way. I never worked You couldn't pay me. I would never get paid. I would take a piece of the business, whatever piece you thought I was worth. I would let— I sort of put it in your hands because I didn't want to be about money. Tell me whatever you think I'm worth. And so people would give me pieces of the businesses and they turned out to be quite successful. We did TiVo, Mondo Media, WebTV, a lot of entertainment businesses at that time in the internet. And that was my business model of working with talent to develop ideas and businesses together. That's how Kleiner Perkins approached me. They approached me. I'd worked, of course, in the Kleiner Perkins portfolio a decade before. Bill was very close with them and had put my name in their ear when they were looking around for new ideas. And, and, and I did not jump right into that job. Right. So Kleiner Perkins at that point was the most successful venture capital firm on the planet. They'd done Amazon and they had done, you know, Netscape and they had done Google, all, all, all in the '90s. And John Doerr was, you know, celebrated. But I loved what I was doing as a virtual CEO. I loved it. And even though they told me I could— I would bring that model to Kleiner Perkins, I was dubious that, that, that my balance of interest in people and business would suit a venture capital firm. And so I put off the decision for quite a while. And I'll tell you, I ultimately made a decision. And then I think I now have answered your question. And I ultimately made a decision because I looked at what I was doing and I said, if I believe that innovation is my passion and what, what really gives me sense of purpose, then I need to open this door and go through it because there's no other place on the planet where I'm going to have the resources and, and team to be able to exercise that passion. And that's why I went to Kleiner Perkins.

Hmm. Well, that makes complete sense. And by the way, were you able to bring your model of virtual CEO or something like it to Kleiner Perkins?

Yes and no. And, and, and I think in fairness to them, they were very tolerant of me. I mean, I probably was one of the more outspoken people on many issues and certainly did not have my venture capital investor hat on. All the time. You know, I had my human hat on a lot. And so they were very tolerant. I would say for the first 3 or 4 years they were encouraging but maybe skeptical. And then I started having success, you know, and when I started having success with this model being in particular, I was the first company that Kleiner I backed the first company that Kleiner had go public after the 2000 crash. I had, you know, the biggest outcome at the time. You know, now it's a much bigger outcome, but with the sale of Nest, my portfolio was not like most of the portfolios there where there were, you know, people would invest in a dozen companies or more. I'd often invest in 1 or 2 and then really put my time and energy. So I had to make really hard really had to make good choices, particularly around people and ideas. So, so I think my success bought me respect, but I don't think the idea of the virtual CEO would have succeeded without some real returns that I was able to deliver to the fund.

Right. Totally. So that brings us back to sort of— I mean, it almost feels like it brings back to your father and reading people, right? So, you know, and also maybe your experience, you know, running businesses and all the things. But But I'm just curious, like, how did you— when you would talk to founders, to entrepreneurs, you had to make decisions, as you just said. You couldn't make a lot of decisions. You couldn't say yes to a lot. You'd had to say yes to just a few. What were the distinguishing features that you looked for, and how did that model evolve as you went?

Yeah, yeah, yeah, yeah, yeah. I, I, I'll take you a bit on the journey with me. I mean, when I started, even before Kleiner, when I was the virtual— doing the virtual CEO work, I thought there was an algorithm for this, right? It had to be an algorithm, right? So if you, if you just had enough data and you were smart enough, you could outsmart the system, right? That's what I assumed. That, by the way, is completely contrary to everything I ever learned from my father, which was my father taught me that you had to have the data, you had to do the hard work, and then you had to be lucky. Then you had to be lucky. There was no shortcut to luck. Gambling is about luck. And to take you on again, another little diversion before I get back, because I love these diversions. The, the interesting difference between gambling and venture capital, everybody sort of says, oh, your father was a gambler. It's natural for you to be a venture capitalist. Completely different. And the reason is that gamblers understand that they don't win no matter how good they are. Without being lucky. They welcome luck. They invite luck. They celebrate luck. Venture capitalists think they're smarter than luck. They don't understand how important luck is. And as a result, they give you every excuse in the book for their success that isn't lucky. And as a result, they don't understand how to invite luck. And there is a way to be lucky. There is a way to be luckier. And, and there is a methodology to being luckier, which I learned from my father. And a venture capitalist won't learn that because they are in denial about luck. Right. So that's the—

obviously, I, and I'm looking forward to getting back to how did you think about that. But obviously I now have to say, really, how do you maximize your opportunities for luck? How do you invite luck? That's fascinating.

Okay, so in my— in the last book I wrote, which is now 3 or 4 years ago called Straight Talk for Startups, I end with a couple of— with a chapter on this. And I talk about how Steve Jobs was the luckiest man on the planet. And I talk about how Sergey and Larry were extremely lucky in the Amazon deal. And, and, and I'm not going to go into details here, but the stories are really fun stories because, you know, there's Steve Jobs was two decisions away, and the two decisions weren't his own, from being a footnote on history rather than being a celebrated entrepreneur. Two decisions, right?

Love that cliffhanger. Everybody go to the book Straight Talk for Startups to go hear that story. Okay, continue.

So, so, so, The thing about luck is, and the luck I'm talking about is not the luck of a house full of money falling on your head while you're walking down the street to the grocery store. The luck I'm talking about is something happening outside your control that fundamentally determines your fate and being responsive to it. And, and, you know, and I have challenged business schools, literally, I've sat down, I've sat at the dais and, and had these debates where I think that business schools should have a course on teaching luck, which is effectively teaching about spotting and, and, and taking opportunities where they lie in spite of how smart your plan is. To the contrary, right? To the contrary. So you can stick with your plan and fail, or you can take your understanding of the opportunity and deviate, pivot. And so the things I think you can do to be better at being lucky— first of all, you have to be excellent to be lucky, because if you're not excellent at what you do, you won't be able to, to capitalize on the opportunity when it happens. You've got to have— you got to be flexible. Meaning you've got to be willing to consider things outside of your own genius in determining your fate. 3, you've got to have a strategic view of the chessboard that allows you to understand where those opportunities are that are outside of your plan, which is the plan of record that moves you forward. And I think you've got to have the humility to understand that ultimately you will not be successful no matter how smart you are, even if you are— you succeed in accordance with your plan, if you're not lucky. And one of the things, you know, in getting— I'm not going to— I'm not, I'm not, I'm not pushing my books here, but in Getting to Plan B, we, you know, John Mullins and I talk about the idea that, you know, most companies in Silicon Valley that have succeeded did not succeed with their plan. They succeeded with something else later. And that's because they were agile enough, smart enough, good enough to see and seize the opportunity. And that's the ultimate thing, which you got, if you're going to be good at luck, is you've got to be decisive. When that opportunity hits, and this is where Steve Jobs is the luckiest man in the world and we can learn from him, when the chance for Pixar to do that deal with Disney was on his desk that he had nothing to do with, or when the chance to sell, you know, NeXT to Apple was available to him because Jean-Louis Gasset had balked at selling, he didn't hesitate. He knew the answer. That's how you get to be good at luck.

Mm. I love it. It just also reminds me that when Bill Campbell pulled you into that conference room and he said, you want to co-found this company with me? And you're like, wait, who are you again? Yes, sure.

And I was the luckiest man in the world.

Yeah.

Right?

Yeah. That's beautiful. I love that. And I am curious, you know, you just said, and then we wanna go back to what you look for in entrepreneurs, but you just said that, you know, the best outcomes in Silicon Valley are the ones which had sort of the plan B, the so-called plan B, something else. And because their opportunity was there and they were able to seize the opportunity because of these cluster of skills, really you're talking about a cluster of traits and skills that, combined together with luck, including decisiveness, including humility and openness, and including agility. But were any of the companies that you— was that— is that true of any of the companies that you invested in, especially in your early days in Kleiner Perkins?

Oh, God, yes. Yeah, absolutely. Positively. No question about it. I mean, the, the, you know, I had companies who made— who actually, you know, found their way to bad luck by making bad decisions around opportunities that came up.

Is there an example? You don't have to name names, but I'm wondering.

Well, I had a company that had a fantastic product. I mean, still today. In fact, I was just talking to somebody yesterday who's got a very cool NFT gallery product. And we were going to go back and look at the old design and the These guys had the most beautiful design. It awed people in 2006 autumn, and the company decided to deviate from that because they were worried it wasn't technically defensible. Well, nobody has ever created a product as good as that. And in the process of their trying to deviate, they spent 2 years not coming up with the successor product and failing. Right. And if we had just stuck with that product and maybe had to fight a couple of fights along the way to get there, we probably would have won. So That's just one example. There's many examples. I mean, companies are always, quote unquote, pivoting, some well, some not well. But, you know, the key thing about this discussion, though, is if you know, if you, if you know going in that your plan is probably wrong, what do you do? What do you do? And I, and entrepreneurs— and I'm going to tell you what I look for in entrepreneurs. I'm going to get there through the through the back door. Okay, let me get through the back door. For a long time after Getting to Plan B was published, founders would come into my office and present to me, pitch their ideas, and then I'd say to them, why, where's your business plan? And they go, no, no, no, no, no, I read the book. You don't believe— you don't want business plans. You don't. And I said, you did not read the book correctly. What that book says is, I don't believe your business plan, but I need to see it because I need to see how you think. I need to see the sensitivities in your business that you identify. I need to understand your assumptions. I need to see how you— the lingua franca of all of that is your plan. So go back and get me a plan, and I guarantee you, when you bring it to me, I won't believe it. But it is important to me understanding who you are and what you're doing. Right? Right. So what do I look for in an entrepreneur? When I started 3 decades ago, I had a long list, this algorithm, right? I had this algorithm. It's going to all work, right? I had a list. If I could just nail these things, bam, press the button, out pops the decision. The more time I spent doing venture capital, the more time, the shorter that list got. And that list got essentially to 3: the person, the purpose, and the value creation opportunity. That's it. Not business model, value creation. My job is to work with you to create a business model. The person, you know, and I like to term this, by the way, in terms of Why? So I call it the 3 whys, right? Why this? Why you? Why now? Now, answering those questions leads to a whole bunch of other questions, right? So you get, you get much deeper than that, but you start with those questions. Tell me why this. Why is this important? Why is this worth doing? Why is this, by the way, in a business where most companies fail? Worth failing at? I ask that question of every one of my entrepreneurs. Is this worth failing at? They always look at me like, what? What? Failing? What? It's like the chances of you succeeding are improbable, meaning less than 50%, right? How are you going to make sure that if you fail, you haven't wasted 3, 4, or 5 years of your life? Why is this worth failing at? Answer me that question. So that why is a really important. Next one is why you. What do you bring to the table that's special? So you got this idea. So everybody's got this idea and ideas for whatever reason, it's uncanny. Ideas come in dozens in the United— in Sand Hill Road. You know, somebody comes with an idea, go, wow, that's pretty cool. The next day, 4 other people walk in with the same idea, right? That's how it always works. Nobody ever walks in with a unique idea. It may be unique for 48 hours. I don't know what happens out there. It's never— So why you? What makes— Why? Why is this the right thing for you? Why are you going to be the person to make this successful? And then why now? What's different about right now than yesterday or tomorrow? You know, Steve Jobs was uncanny in picking the now. He killed their first mobile product, the Newton, because it wasn't ready for prime time. The technology wasn't ready. The market wasn't ready. And when he came up with the iPod, it was training wheels for the iPhone that came out exactly when all those things were right. So what makes this the right time? So those are the 3 whys. Those are the things I look for in people and in ideas. And, you know, I just let these lunatics sell me a vision of the future that I don't have and try to pick the right one to join with.

Mm-hmm. Mm-hmm.

Is—

I mean, I love, I love how simple that is. And you take the algorithm and you sort of condense it down to those, you know, sort of 3 questions and then, you know, using your people skills and also your own like strategic landscape sense, you know, seeing, seeing if that makes sense. Randy, I'm going to ask you a sort of a weird question, but like, what's it like to shut a business down? Like, what is that moment like with the entrepreneur to be like, you know what, game's over on this and now we have to wind down?

Wicked sad. I mean, you know, and because I work in an industry where most companies fail, I feel like I work in a hospice, right? Because most, most of the time that's what I'm having to do is to buck up the CEO and management. If I hadn't— didn't have to fire the CEO for having done something wrong, terribly wrong, which we recently had to do in a company that had been doing quite well. And I was quite sad. But, you know, you realize, first of all, if it's your business, you, you realize it's part of what you have to be good at doing. You have to be good at getting these people back on their feet, back in the jobs. I mean, I can remember when Go Corporation failed and we sold it, but we sold it for very little money. We had to close— essentially most of the employees then left. John Doerr spent tremendous amounts of time on the phone making sure each one of us had a job. He was a reference for everybody.

He—

and he considered that his job to do that after the fact, after the time when it was clear he wouldn't make any money from it and where his future was in other investments. He felt like it— he couldn't close the books. And that is a best practice that I've learned as well.

Amazing. So significant, so important. Randy, I just have a few more questions for you. I know we're going to go off on a tangent on this, but I really have to ask you, Randy, you were kind enough to write the foreword for my book, From Startup to Grownup. Thank you, Randy. And I asked you on purpose to write that. By the way, I plucked up my courage during the pandemic to ask you to write that foreword. But I thought it was so intriguing because when we met each other at your coffee shop there in Portola Valley, You said to me, eh, founders shouldn't be CEOs. Eh, you know, not so much. And I really felt like we have this. So I want to give you the airtime right now to, to express why founders should not grow into the leaders as I put forth in my book, From Startups to Grownups.

Oh, well, thank you for the opportunity. Look, from the first time we met, I knew I'd met a kindred spirit. I knew that you cared about people that as much as I did, and that your purpose in life was people, much like mine was. We had different practices, but, but towards the same end. And, and your faith in being able to turn founders into great leaders is in— is incredibly noble and one that I embrace. But my— the reality of my life would suggest that there are caveats. And the biggest caveat being that, that the nature as a business— nature of the business changes through its stages of development. The requirements of this, of Who should be the leader change as well? And the principle that I saw being, being promulgated when I was starting in the business was you were going to grow every founder into your CEO. Everybody was going to be Bill Gates, right? Everybody was Bill Gates, who is an exceptional person. You can't— we can't all be Bill Gates. Is not going to be the— just not the case. And what I realized was in trying to make everybody Bill Gates, we were doing a disservice to these businesses, to these teams, and, and often to the founders by demanding of them the ability to change their skills, to grow and develop skills, maybe change character and personality in the process, and that the skills they had as founders and entrepreneurs were so precious that turning them, turning magicians into set production people was not necessarily in the best interests of innovation or of the people involved. Now, that's not to say that every founder shouldn't be given the opportunity to grow to their potential. But I don't think we do them a service by insisting that they go the distance if that's not where their heart and their skills lie.

Beautiful. I totally get that and I completely agree. And, you know, that is the sort of— that self-knowledge that you had already talked about. So that's— I totally get that. Just two more rapid-fire questions.

Yeah. Yeah.

One is, what do you wish you had known earlier on your journey?

I wish I'd had more confidence that if I just made the right decision now, it would set me up to make the right decision later so that I could— I wouldn't be as anxious about where it was all going. And while I never had a grand plan, I certainly always felt like I was ready to fall off a cliff. And in retrospect now, I wish I had had— I'd been maybe even a little bolder with a little more confidence in making some of those decisions that have led to where I am today or to someplace else.

Yeah, beautiful. I totally hear you. Such a common thing for all of us to sort of think bigger and be bolder. And the last question, what advice do you have for founders as they grow on their journey to be leaders?

Find yourself a great coach or personal board of directors or mentor, somebody who you can go to who's going to take that mirror and show you who you are and what's really happening. Somebody you have to listen to when they give you the bad news. And somebody who you are not going to resist when they give you tough counsel. Somebody that's going to let you be your best self and lead you to the self-knowledge that will create not just career success, but I think personal success and satisfaction in your life. Find that person or people It's a lonely job to do that job. Yes, you have a team, but you're still the boss. You can't show weakness. You need somebody on the outside who you trust, who believes in you, who cares about you, who you are going to listen to when things get tough.

Beautiful, beautiful. Randy, what a rich conversation. Thank you so much. Thank you for writing the foreword to my book. Thank you for your support and your friendship the past years. And thank you for sharing It's a really beautiful conversation on my podcast.

Oh, I had such a good time, Alisa. And you know, I'm such an admirer. So godspeed.

Thank you. Thanks for listening to From Startup to Grownup. If you like what you heard, give it a review on Apple Podcasts so other people can find it. And if you know of a founder or someone else who is meant to be on this podcast, drop me a line through my website, alisacohn.com.