George Robson - Partner at Sequoia Capital

Hello listeners, my name is Dee and welcome to another episode of the LSE Focal Point Podcast. Today we're delighted to be joined by George Robson. George is a partner at Sequoia Capital. He's an LSE alumni from the economics class of 2016. During his time at LSE, he founded Kickstart London, the UK's largest student run accelerator program. Active across the MSc, UCL, Imperial and LBS. He was also the President of the LSE Advancement Society, one of the two societies that merged into our society, the LSE SU Business Investment Group. He began his career in investment banking at Morgan Stanley's UKN Arlen coverage team where he was involved with Vantiv's $10.4 billion acquisition of Worldplay and Sky's proposed 11.7 billion pounds sale to 21st Century Fox. He then joined Revolut as a senior product owner and was the first hire into the Revolut Premium team. He managed multiple functions across product and design, engineering, data science and analysis, product marketing and strategic partnerships. In August 2020, he was the second partner to join Sequoia's London team. He has led numerous investments in the fintech and consumer sectors. George, how are you doing today?

Dean, what an introduction. Thank you. Yes, I'm very well.

Thank you for joining us today. And to start things off, let's dive into your client identity alongside academics. You were one of the two first years accepted into Google Bold, invited into Bloomberg's hall of fame for being ranked top four in EMEA in the Bloomberg Altitude test, co founded Kickstart with Microsoft, launched LSE's first hackathon, ran a 2,600 member society as President and graduated with an offer to join Morgan Stanley. You were the president of the LSE and C Investment Society. What was the Society like back then and what were some of the initiatives you did in the society?

Yeah, I mean, so I, I came to LSE and obviously came to London excited because it feels like a center of gravity for lots of different types of talent. LSE is a wonderful case study of that. As you know, it's incredibly international where you obviously have a diverse set of people in terms of what they want to go out and achieve. And the reason I wanted to get involved in society like was for I wanted to put myself at the center of the action in terms of where some of the brightest people on campus were coming together to learn about ideas. But obviously I was doing that as someone who didn't know very much myself and didn't have a huge standing in the world of Business or finance. So I really went there to learn. I think the insight that I had was LSE as you know, is a wonderful single faculty institution. Right. We focus on social science at the lse. London has a bunch of different universities, all of which are exceptional at one or multiple things. So the key thing for me as part of the society work was actually to broaden the reach of beyond the campus to make sure you were bringing people in with different functional expertise. Whether that was design engineering to complement the existing social science base is something that the LSE has. And that's what led me actually firstly to applying to Google. It was really about reaching out to sort of build that network across the eu, but also into Kickstart because Kickstart was exactly around that genesis that you can't found a company as a person who's just a designer or just an engineer. In reality you need to build a multifunctional team and it's hard to do that if you're on a campus that specializes in one thing. So it's very much about broadening that community and bringing people together.

Thank you for sharing that. Kate has more better experience when it's co founding Kickstarter with Microsoft. You still sit on its advisory board today. How has the accelerator evolved over the years and to what extent does it align with your vision back then?

Yeah, I mean I Kickstart, like most important things in life is a team effort. I think we were really lucky that for a bunch of my friends and myself, we were at a similar point of we knew we wanted to take that leap of faith into entrepreneurship but frankly we didn't know we didn't always have the networks to do it ourselves. So it started with an idea that we could go out and find people to anchor the program across those different core universities you mentioned. As I said, to bring together people that were excellent at design engineering. As you may know, in London there's lots of medics who were going through entrepreneurial pathways. There was actually always a very strong medical representation in terms of companies coming through the program. And the idea was to provide this framework for basically 8 to 10 companies per year to go through a kind of 10 week program. The structure has changed a little bit over the years to teach them about ideation, coming up with a sense of who your initial customer profile or ICP is to sell your product, learning how to do customer references and understand whether the pain point is worth really targeting and then ultimately to found a cross functional team to go out and attack them. I think what was Interesting about that process is you have people applying with ideas and people who are applying not with ideas, but with skills who wanted to join early stage companies. So actually all of the company formation was happening in the first few weeks of the program and we facilitated the founder dating, you know, the early evaluation of whether this is the right market, the right product to go after all of those things. Obviously, my friends and myself doing that largely for the first time as well. And what has happened over the, over the years is obviously we've had multiple cohorts. The structure, as I said, has changed from having the kind of founder dating to found the idea and then over the summer, now they run a sort of post program cohort where they help people, then evaluate that, prepare those companies, fundraising. And I think the really nice thing is there are businesses now that are kind of series A stage companies, companies like Suvera, which is founded by one of the first cohort members, Ivan, which are now going on to become independent companies, you know, generating revenue and acquiring customers.

Well said. And let's talk about your career journey. You joined Revolut when their product was just starting to take off. What was the factor that motivated you to take on the risk, moved from a safe job at Morgan Stanley and joined a company that was 2 years old.

I think when you step out from university into the world of work, you feel like you have a very naked cv. There's your university degree on there, there's maybe some internship experience, a couple of things that you were able to stitch together. I think the way I always thought about it when I was studying, but also kind of going into the world of work is you shouldn't necessarily solve for content of what you are doing, meaning it doesn't really matter so much what industry you are in per se, because again, you're so junior, you're so early in your career that really you're just acquiring knowledge every day. Anyway, I think what is much more important is to understand the structure of the work you want to take on, meaning how big or small should the team be? How much autonomy do you feel ready for? What kind of problems do you like to solve? Do you like them to be analytical in nature? Do you like them to be research driven? Do you like them to be more technical, whatever it might be? Because effectively what you're doing when you understand those characteristics is it shapes the kind of work environment you want to be a part of. And in many ways that's going to be reflected in the culture, probably in the compensation structure, because those things are often Quite aligned. And it gives you a sense of this really important question that we see in founders that we invest in at Sequoia, which is really at this stage in your career, what level of comfort do you have? Ambiguity. Right. If you're going to go out and create something that new in the world, there's always going to be uncertainty around it. How comfortable, how ready are you for that? So really, when I was going into Morgan Stanley, I'd already come from this environment where as you said, I'd worked on Kickstart, I've been part of society life. I'd actually worked on things like the Hillary Clinton campaign for a year in my final year at lse. So I'd worked on a whole mix of different projects, again in companies big and small, you know, as companies as large as Google, as small as Kickstart. And I had a good sense that actually I had a high comfort with ambiguity. I was confident that I wanted to have much more ownership over my work and I wanted to be in a smaller, ideally flatter organization. And Morgan Stanley was a fantastic jump up experience. But when I saw Revolut coming up at that time, I saw my friends, many of which are from the nsc, many were international, therefore they had kind of multi currency needs. Travel was at the core of their lives. It just really resonated as a value proposition to bring at the time what was basically a multi currency account to allow you to move money across borders. I think the second thing that was very important is I wanted an uncapped tam. I wanted a sense that there's always risk in joining early stage companies. If this works, I want this to be ginormous. And I think financial services supports many of the world's largest asset classes. It's an opportunity to build a business that can be a trillion dollar bank in theory, right? If you can build something that scale, take it across different geographies, but then finally to do that you need to be part of a team and a culture that really resonates. And I think I got to meet Nikolai and this guy Alan Chang who hired me at the start when I joined. And I just saw a level of intensity that I'd seen in finance, but felt much more directed inside of startups. I think they really felt like this was going to be their life's work and they were going to take a big swing to build the future. And I just found that incredibly motivating at the time. I remember on the website there was this tagline on the recruitment page that basically said, eat what you kill, which sounds like something that's a little bit macabre, but actually it was just this idea of building an environment that was meritocratic that allowed this decentralized ownership inside of the company. And I knew that's exactly what I wanted when I saw it, when I met the team and what I thought about the market.

Thank you for sharing that journey and shifting the focus to Sequoia Capital and your experiences with the venture capital industry. What then motivated you to join Sequoia when they just opened their London office? How did venture capital differ from your skill sets from working at a startup and investment banking?

So Sequoia has been around now for 52, 53 years, partnering with early stage companies. Sequoia was therefore set up a long time ago in the us, but it's relatively recently set up an office here in Europe about three and a half years ago, having been investing here for 10, 11 years plus into companies like Klarna, Unity, UiPath, some of the large companies coming out of Europe. And obviously Revolut was a venture backed company. I knew what it could do to accelerate a business. But Sequoia, I hadn't spent a lot of time with one on one. But I was leaving Revolut, I'd actually raised pre seed funding to set up at the time what was a health tech business that was a little bit impacted by some of the factors happening in Covid. So I was there kind of regrouping a little bit at Revolut, thinking about what the next steps would be and Sequoia emerged as this opportunity and it was learning about the culture, the style of company building and the way of investing where basically we make one to two investments per partner per year. Therefore that's incredibly high conviction in terms of the companies we work with. We try and partner as early as we can, often as early as the seed of the pre seed stage, and we have an opportunity to be an invited guest for the company's whole arc, right from pre seed to pre IPO and beyond in terms of how we work with these founders and we do that with people that are among the most ambitious on the planet. So for me, that idea of being able to work on a small number of projects that met that criteria was incredibly attractive. Never mind the team of people that are around me to help me grow as an individual to learn about this industry. I mean, working at Revolut we saw scale, we saw, you know, what it takes to hire exceptional people and how to think about the right strategy to build a product that Obviously helps me today when I work with founders, but the things that are different, I think when you move into venture is you got to learn about how to evaluate not so much the difference between kind of good and bad businesses, but it's really about how to take good companies and make them great. And you do that by leaning on the tribal knowledge you have inside of the team, the wisdom, the people you have around you, and frankly, the exceptional founders that are in the portfolio that have come before the businesses you're now working with to really learn about how great companies are built.

Let's dive deeper into that. Talking about evaluating companies, given that you are investing in companies at a very early stage, often backed with a limited track record, what are some of the characteristics you look for the founders and companies you back?

Yeah, I think there's a few pieces at seed and precede them as I think we obviously care about having an outlier team. In practice, what that means is it's some combination of domain expertise. So some unfair understanding about the market in which you are building functional expertise, meaning some of the skill sets that are required to go and execute on that vision, needs to be associated with the start of building this business. And it's just about grit and determination that these founders, these individuals, have been able to show. And we look for that. If not everybody was stranded on a desert island for two weeks and had to survive, that shows up in lots of small details about decisions you made when you were growing up to study something, play an instrument, push yourself to be exceptional in some way and prove that you are someone who is curious about the world, able to acquire knowledge, and able to invest behind that skill set to become exceptional at something, recognizing you are in the right time with that domain expertise, that functional expertise, and the grit of who you are to go out and build this company and being able to articulate to us the sort of why now for all of those different features of this founding team to come together. So that's the outlier team, I think. Second, we look for, you know, a market that is on the right side of history. It doesn't mean that that market needs to be large today, but it needs to be something where we believe, you know, over time, it can support a small number of very large businesses. And then finally combined with an approach which is something that we call a kind of unique and compelling insight. Unique obviously implies different, compelling implies better. We think you need to be different and better to have a chance to win in a market on the right side of history with an outlier team. So it's really those three criteria that makes sense.

And once you have partnered with the founder, what happens next? How do you work with them to build and develop their company?

Yeah, so we start the rest of history. I mean, if you think about really early stage businesses, what you need to prove in the first year, I think one is that you can attract, hire and retain exceptional people. And for many, you know, first time founders, particularly here in Europe, they may not have been managers of large teams before. They may not have been put in the driving seat of making hiring decisions. So it's actually working a lot to define the culture inside of the company. Not just the stuff on the website, but the culture and practice of how you run the business every day. So a lot of it is setting that up, it's making sure that you can support founders in early kind of customer validation. So making sure we're going after the right type of customer. If we target that customer, aren't there enough of them to be able to build a company? If not, how does that initial wedge, that initial product we are launching, allow us to expand downstream to make sure we're capturing more of a market opportunity over time and really helping founders to get that sequencing right. And I say help because obviously our job is to invest in people that we trust. Although, you know, 98% of the decisions inside of the company, we are there to help them get the 10 to 15 decisions a year that really matter, are strategic and have a path dependency attached to them. Right. Ideally as early as possible.

Thank you for sharing that. And what are some of the sectors that industry that you're most excited about in Europe at the moment?

So Europe has tailwinds on multiple levels. I think, you know, broadly there's a lot in the news and the media, as you can imagine, around AI. But where I really start to impact industry is I think a lot around industrial automation. There is a lot of near shoring, I. E. Manufacturing moving back to the west at the moment to do that effectively. In a world where we have a relatively high cost base to be able to manufacture things, the best way to compete is to obviously invest in automation inside of companies. This shows up in robotics, it shows up in companies like Arobco. In our portfolio, it's automating, CNC operation. It shows up in building digital twins of manufacturing processes to make sure they're fully optimized. It shows up in using things like computer vision to monitor production processes inside of factories and inside of warehouses. I think that's one big bucket and the second thing I would call out is there's a lot of digitization that is happening, particularly in Europe, is really triggering this rise of the SMB. Meaning there's a lot of software that was enjoyed by large companies for the last 10, 15 years that have now trickled down to smaller and smaller businesses, making them able to access things like cloud based accounting through companies like Penny Lane in our portfolio, next generation CRMs, ERP systems, financial planning tools, things like this that are really required to run a successful organization at scale, but can actually start now when you're much smaller.

Thank you for sharing that and diving deeper into the AI you talked about. We're hearing a lot about AI at the moment. How do you see this landscape evolving? Will the integration of AI be a necessary condition for all companies in the future?

Yeah, I think every company needs an AI strategy, but what that means in practice, you know, all companies should do an audit of how can AI accelerate the growth of our business? And that might be trying to help with, you know, more scalable distribution of product. It may be providing better automation inside of your product so that you can make it, you know, better enriched in terms of data, more, you know, simple workflows that have a friction for people to activate or, you know, it might just be about reducing the cost of the operations required to run your company, investing in better automation for your customer support, your sales outreach or things like that. So I think every business should have an AI strategy. I think the crucial thing to remember though is AI as a technology doesn't give you a distribution advantage. You need to think about still the same questions of what job to be done. Am I going after for my customer? How do they solve this problem today? Is this better, meaningfully better, ideally than the way they solve it without me? And AI can help to sort of enable some of the plumbing that makes that possible, but in and of itself, it's not a solution to every problem.

Makes sense. And was your experience of FinTech? How do you see AI impacting that industry particularly?

I think in massive ways. I think probably two concrete buckets. I think one is we are going to see much better personalization of products and product recommendations to customers. Really where that will come from is using things like, yes, AI, but also like traditional machine learning. It will be able to start making underwriting decisions based on income, right? And we'll start to use income based underwriting rather than just using things like a FICO score or a credit score, you know, here in the eu. So actually opening up financial accessibility by Using forms of this alternative data, but also using it to provide better recommendations. But I think the other type, which is very concrete, you know, financial services companies, because of the regulation on them, have requirements to build pretty large customer support compliance teams to make sure they can support the company's growth. In reality, a lot of that work is actually having conversations with customers, answering questions, collecting documentation, understanding that documentation, comparing it versus rules. And actually AI is a perfect tool to use to help to, you know, automate a lot of that interaction. So what that means is, you know, in the future you don't need a compliance customer support team that is say 40, 50% of headcount, but maybe 20, 30% of headcount. Those are meaningful cost savings for these very large companies.

Thank you for that perspective. And transaction volume in the venture capital industry has declined along with the broader private equity market after the boom in 2020. What advice would you give to the founders who work with on how to navigate the current market conditions?

I think I would say now is actually a great time to found a great business. If you're building a business that has those characteristics I mentioned earlier, outlier team, industry on the right side of history. And a unique and compelling insight. You have an opportunity today to create a center of gravity not just for talent, but actually also for fundraising in your market. I think the willingness for investors to, to invest in a fourth, fifth, sick competitor to your business is lower than it was maybe two years ago. So actually the opportunities for you to be bold and go out and try and capture mind share and build a center of excellence in a given industry, I would argue the payoffs are actually much greater today. And for you to be able to do that again with some of the accelerants you mentioned around AI, I think there are incredible why nows for some of these multi hundred billion dollar industries to be disrupted for the first time in decades. So I think what I would say is, you know, point one, I think it's a great fund to find a great, a great business. Point two, we generally encourage founders that we partner with just to focus on things inside of the building, things like a fundraising environment. In reality, the best way for you to have a great fundraise is to build that great company, to focus on that customer love, that customer interaction. Those early metrics that indicate you are delivering value into this market. And if you can do that right, then obviously the fundraiser will be easier and obviously you'll be able to find a great partner to take you to that next stage. So focus on things Inside of the building, I think is crucial.

And finally, turning attention to our audience. What insights or advice would you like to share with the current LSE students who are just starting their careers?

I think, to be bold, I think that what has really impressed me, you know, as a sort of observer, if you like, on the LSE over the last 10 years, really, because it's, you know, almost 10 years since I joined LSE, I think, is that the campus used to be heavily focused on finance and traditional financial careers. I think it's been fascinating to see as technology has risen in Europe, it play a much greater role in people's mindset around learning about how to acquire skills, how to build companies, how to evaluate those companies. Of course, you can ultimately go into finance to apply that. But I think having that level of curiosity to step out and be bold and try and acquire different types of experiences, I think is very valuable. And I think if I look at what little I've been able to do over the last few years, I think a lot of it was enabled by having that mix of different experience. And I think what I would say is, you know, if you put yourself in a great position where you've got a competitive internship inside of a great financial firm, you know, whatever it might be, do it for sure, because you'll learn something and you'll meet great people along the way. As you think about how to use your time at university, complement that with other things in completely different environments. And again, I emphasize, don't always focus on content. You know, focus on structure, how big or small the team, how little or, you know, how too much ambiguity, the level of autonomy you want over problem solving, those are the kind of muscles that will actually put you in a much better position over five or 10 years rather than, you know, optimizing for the next two years to get that quick exit to private equity.

Thank you for inspiring advice and your time sharing your amazing insights with us. And thank you to our listeners for joining us on this episode. Stay tuned for more content. Thanks.