UPWARD Fireside Chat with Jess Lee - June 7, 2017

Sa.

What a beautiful night in Saratoga. Right? Not bad weather. It's not raining. Although after this year, we kind of were looking for more rain. I think we're so excited to be here today. We've got Jess Lee. I think some of you know a little bit about Jess. We're going to talk a lot more about her in just a few moments, but give a big hand to her for coming out from Menlo Park. And thank you for all of you for coming out, too. I know you have to drop drive here, and that's painful, right? How were the commutes? Were they awful? Yeah, awful. We had one thumbs up. You had a good commute. You live in Saratoga, don't you? Yes, you do. We got several Saratogans had a great commute tonight. Okay, that makes sense. Everybody else suffered. Actually, we have a few people from out of state, so they really had a commute. Texas and a couple of other folks. So thank you all for coming. We are, I think, in good shape in terms of seating. So why don't we get started? I know folks are still grabbing a drink or two, but we want to make sure we maximize the time. And I want to introduce myself. You all know I'm Lisa Lambert. This is my humble abode. There's a forest behind you, animals back there. But we've got, you know, guards to protect you just in case some monkeys or something climb on the trees. No, we love living out here. I work in Menlo park, so it's a lot different. One of the things that we really loved about being in Saratoga is it's kind of off the beaten path. You can really relax, you know, Very lush. And so we wanted to welcome you to our home. I do an event at our home at least once or twice a year, and those are always the most memorable ones. I think everybody feels a little more relaxed, let the hair down and really kind of get comfortable. Maybe a couple more glasses of wine than you normally would have if you're at IBM or DocuSign or Intel. But we're glad to have you here. So I wanted to start with just a quick update on how we're doing with Upward. How many of you guys went to the big annual dinner that we had in February? Okay, good. Good percentage. And we had an event just recently in San Francisco at DocuSign. Were there any DocuSign folks there that came? So a handful of folks. So we're doing a lot of events. We have the Bay Area, which is where I started Upward, and we've expanded to a number of different locations. In fact, we've launched this year. Washington, D.C. we're going to launch Los Angeles. Chapter. Chapter in Brisbane. Sydney. We're going to launch a chapter. What's the other chapter? London. We have chapter Dallas. That's the other lot.

Thank you.

Thank you, Margaret. We're launching in Dallas this year. There's a long list of them. And we're already in London. We're in Tel Aviv, we're in Buenos Aires, we're in Chicago, we're in New York, we're in Seattle, Austin. I mean, it's just. It's been remarkable, right? I started this thing literally in my backyard, right, thinking, you know, 40 to 50 people in my Rolodex going to these meetings, every single meeting. There's rarely a woman in them. Whether they're venture capital meetings or whether they're entrepreneurial meetings, rarely saw a woman. And after so many years, I thought, well, you know what? I may not be able to change the world, but hopefully I can change a little piece of it. And so I said, we're going to convene some folks at my house. And I thought it would be 40 to 50. Ended up being close to 100. And then the next event we ended up having at the house, 140 people attended that one. And it just kept growing. And we're nearly 5,000 members now. And this is just word of mouth, right? We haven't done any marketing, so we just hired our first marketer and we're going to start to do some marketing the latter part of this year. We did a little bit for the annual dinner, but you'll see a lot more about it. And we're growing, so we're really excited about it because the mission is to create a global network for executive women, and they just don't exist. I mean, we're working on upgrading our website. One of the things I'm going to put right at the top is the only global network for executive women. There really aren't any. And the idea is that if we're in community with one another, we can actually help each other get to the next level. And that's so important in the world that we live in today. If you don't know folks, if you haven't extended your reach outside of your work group and getting your job done, it makes it really difficult to get ahead and even more difficult when there's a perception that there's only one or two seats for women at the executive position or on the board. And now we're all competing for those seats instead of collaborating to get each other to the next level. So that's what Upward is about. We are expanding and we expect to do a lot more over the course of the next few years. My goal is we have 100,000 members in the next five years all over the world. So wherever you go, you're going to be able to connect up with an Upward woman. Isn't that cool? Wouldn't that be great? I love that. All right, why don't we clap on that? I like that. That's a good mission. So now in terms of what we're going to do tonight, we're going to have a fireside chat with Ms. Jess. And the subject is her background, which is quite amazing. She's a Google former employee, ran a number of businesses there. She was also CEO of Polyvoren. She's going to tell us a little bit about that experience and co founder there. And now she is at Sequoia Capital. How many know Sequoia Capital? Right? Everybody knows Sequoia Capital. It's the best venture capital company in the world. Right. And Jess is the first woman partner. Shout out for that. I love that. I love that. So I'm gonna ask questions for the first few minutes and 30 or so and then I'm gonna open it up for you. We've got two mics, so we'll ask that you wait for a mic when you have a question, but do think of questions because I'd like you to, you know, pick her brain a little bit on how she's done what she's done and ask some provocative questions. I'll do my best to help there in that regard. Also I want to shout out to Dell who is sponsoring this event and Elizabeth, you want to come up and say just a couple quick words about Dell. So Elizabeth is a director for Upward and she is going to just make a couple of quick words regarding Del's commitment to Upward and advancing women.

My commitment to Lisa. Thank you for hosting us. No, I'm super proud to be here with two women I really, really respect. Known Lisa a long time, just getting to know Jess this year. But I'm the entrepreneur residence at Dell and one of my jobs there is to find high potential women to invest in to support and the best ecosystems that lift up all entrepreneurs. And so when Lisa asked me to join the board of Upward, it was a no brainer both for me and for our company. But one of the things I want to encourage all of you is to actually help us meet that 100,000 women goal. So when you leave here today, if every one of you could just ask one person to join upward, that would be huge. And just think about how you're paying it forward and help them sign up and whether it's in any of the cities we mentioned before. It would be amazing to have you. So that's all I wanted to say today and thank you.

Here we go. Jess, tell us.

Hi.

So I want to start with Google and polywar and then we're going to jump into Sequoia. But I know you have a computer science degree. How did you get to Google? And then the transition to Polyvore.

So I'm originally from Hong Kong. I grew up there and then I moved to the US for the first time to go to Stanford where I studied computer science. I do remember that my freshman year was extremely overwhelming. I had went through all kinds of culture shock. I wasn't used to living in the US So that was a terrifying and awesome experience. And then at Stanford I did study computer science and I think it's great to get a technical background, but that's absolutely not necessary for venture or even for tech at all. We've got many great people. I know a bunch of. One of my favorite ex Googlers I used to work with is here. Although you do have a technical background, don't you? Biology. Biology. There we go. But you know, one of the greatest venture capitalists of all time is Michael Moritz and he was a journalist by background. I think the main thing I learned at Stanford actually is, you know, everyone there was valedictorian in their high school and everyone came in like, yeah, I'm the best in my class. And then you get there and everyone is just so smart. So you go from being very confident to being like, oh my God, what am I doing?

And then.

Yeah, and that's what it feels like to be around amazing people. Right. Who are really top of their game. But that's actually the feeling you're supposed to search for, I would say. And it was interesting to see that some people kind of gave up. Some people were already. They were actually the smartest and they continue to be the smartest. And then a whole bunch of people just learned to. To work their asses off and work really, really hard. And I was definitely in that group. Yeah, that works. Yeah. Yeah. I mean, I think hard work can win over being naturally talented in many ways. Yeah. And then so to answer your question, I ended up at. I had actually accepted a job out of college to be a software engineer at Intuit. And I was gonna go work on QuickBooks, but then I got a call from Google and they said, hey, we'd love for you to check out the Associate Product Manager program. And I had no idea what a product manager was. But I went through the interview, I met some really smart, amazing people, including Marissa Mayer, who later became the CEO of Yahoo, as well as Brett Taylor, who later became the CTO of Facebook. And I just remember thinking, wow, these people are really smart. I should just kind of go be near them and learn. And then I also got some great advice from Marissa, who told me, actually straight up asked her in an interview, in her interview of me, I don't know if I want this job. I don't know what a PM is. Do you have any advice for me? And she very kindly, instead of telling me, telling me off, or saying something quite dumb in an interview, she told me that when she looked back on all her decisions, she always tried to pick the most challenging path because she knew that even if she failed, at least she would grow and learn and that you should always optimize for learning. So that advice has definitely stuck with me. So go where the great people are and go where you can maximize learning. Yeah. So that's how I ended up at Google.

And is that what happened when you went to Polyvore?

Yes.

I know you like the technology, you like the products. You were doing some of the thinking around that even before you joined, but what was the hook? Because goals. Pretty appealing, right?

Yeah. Google was a fantastic place to work, but what happened is someone showed me Polyvore. So I didn't come up with the original idea for it. It was three ex Yahoo engineers, all dudes, who were working on this amazing fashion app. And I was playing with it and I was using it two or three hours a night and really fell in love with the product. And so I wrote a note to the founders with some suggestions and feedback and complaints, and then they wrote back and said, hey, these are great ideas. Why don't you just come work here and fix all this stuff yourself? Literally, that's what happened.

Yeah.

Yeah.

And so I did.

Okay, ladies, get your emails out commenting about businesses?

Well, you know, it's different when a user complains and says, I hate you, like you've got all these problems versus this is not good. Can you hear some suggestions for how to fix it? So I think that helped. And then I ended up going there and that was a big part of it. I met the founders, I thought they were really smart and I knew that the company was small enough that I would have the opportunity to work on a lot of different things. Right. Because there was no marketing and no BD and no pr, that maybe I could learn a little bit more about it or maybe get to do a little bit of it myself. And that's definitely what happened.

And how small was it when you joined?

It was just the three founders. That was the first real hire outside of the founders.

Okay.

So, you know, she was named honorary co founder because of her contribution to the company over the course of the.

Yeah, I mean, that's a very generous and unusual thing, is a few years in, the co founders came to me and they said, hey, we've always thought of you as a co founder. You've always acted like one. So we're just gonna start calling you co founder. And then more importantly, here are some of our founder shares. Like, they gave me some of their own money.

The money. No, no, no.

But, like, I mean, it's just a testament to their generosity and sort of the foundation of this culture. And that very much shaped me. And I think it's incredibly important to pay it forward. So, like, what you were saying with upward, like, it's so important to pay it forward. Like, if you get a great windfall like that, like, make sure you distribute going forward.

Yes, yes. And so you were VP of products and you helped with the design and really what Polyvore became had your fingerprints all over it. But eventually they made you CEO. So how did that progression go?

Well, we did go through multiple CEOs, so maybe I was the third choice. But what ended up happening was my dream of getting to dabble in different departments kept coming true. So a great example is we started to, you know, time to make money so we would build a consumer product. It was time to monetize it. And by virtue of being the worst front end engineer on the team, like, we're all engineers, but if anything else came in, like an advertiser asking us about something, like, I was like, oh, let me take that call, because it's a better use of your guys time to write the code than mine because I'm the worst engineer of all of us here. Because they were really, really good, and I'm not that good, but I started picking up the phone and answering the advertisers. And I remember my very first sale. I had no idea what I was doing. It was Piper Lime, part of Gap, and they said, hey, we have 10k left in our budget. We're getting traffic from you. We'd love to get more traffic. Can we pay you? And I was like, yes, yes, I can sell you a contest. And I kind of picked a feature we already had and started to sell it to them. And then they said, great, send us the IO. And I was like, what's the IO? So I was googling on the phone IO, yes, I will send you an insertion order. So there's a little. There's a very strong element of fake it till you make it in there. But, you know, you just. Just keep going. Right? Be scrappy. And then. So what happened is I started the beginning of our sales team, and then I found out that I was not that good at sales and I didn't want to do it. So then I. But I knew just enough to be able to hire a real salesperson, so brought someone in, and then naturally that person started reporting to me. And then that happened with multiple departments. And then at some point, all the departments were reporting to me except for engineering. And that's the point at which we decided to make the CEO transition.

So did you go in thinking, this is how I'm going to execute my strategy to the CEO position? No. So, I mean, were you thinking about being a CEO or a COO at some point?

I was thinking of being a founder or an entrepreneur because so my mom is also an entrepreneur. I think this is interesting that many female founders or entrepreneurs have a parent who's an entrepreneur. And I think part of that is, like, when I was growing up, I saw my mom running her own business out of our apartment. It was a small translation and interpretation service, so not a tech company or anything. But she would also tell me, it's great to be your own boss. And I could see that she was a lady boss. And so it never occurred to me that a woman couldn't be a leader or couldn't be a CEO because she was just the role model. So I think that was a very big part of me thinking that I wanted to be a founder one day. But I definitely did not enter Polyvore with the expectation that it would eventually become my company. I thought, okay, I'm just going to go there and maximize learning, learn from smart people, and then go figure out what I want to do and then do that next. But I ended up staying there for seven and a half years before we sold the company to Yahoo.

And you got to work with benchmark Peter Fenton, specifically, who's kind of famous in the world of investing, to tell us what that was like.

Peter is awesome. So we're Very fortunate to have backing from some incredible venture capitalists, including Peter. And I would say, part of when I think about what distinguishes the great VCs, or if I was going to go back and give my younger self advice on what to look for in an investor, one of those things is that it's the individual person, right? Beyond the firm, it's the person. Do you want that person to be your first phone call when something goes wrong in the bad times and your company's never a straight line to the top? Polyvore certainly wasn't. Even if you are doing well generally, it's still like this, right? So in the moments that are low, you want someone who's going to be a shock absorber, not the person who panics and freaks out and then, like, immediately fires you at the slightest sign of, like, problems. And then in the high points, you don't want someone who's just a cheerleader and is like, oh, you're amazing. Don't worry about anything. You want someone who's a sparring partner who's going to say, have you thought about what's coming around the next corner? Have you thought about the next platform shift? So that's something to look for. That's really important. So that first phone call and then the other thing is obviously the firm. Both Benchmark and Sequoia and many other firms have not only an amazing network and tribal knowledge from years of doing investing, but also they have a community of founders that you can tap into. Right. And sometimes you need that. Founder to founder, peer to peer support. Like, the reason we're all here together is for peer to peer support. That's really, really important. And if you can tap into a really great network of founders who elevate you, make you elevate your game, can advise you, then I think that makes a really big difference to whether you can be successful or not. So that's one of the things that was most helpful for me working with Benchmark.

Yeah, I can attest to that. That is absolutely vital because you feel like you're on the roller coaster every single day. I mean, even the good days feel like rollercoaster days. And so having someone that's gone through it and, you know, has the wounds and then recovered is encouraging for sure. Did you have any difficulty raising capital? I know eventually you get an exit. We'll talk about that. But were there any issues when you became CEO?

The hard thing, the hardest part of fundraising for us was that, you know, we were a product targeted at women. Right. In particular, women's fashion. And 94% of VCs are men, so you can't really.

94%. Yeah, 94.

Maybe 90, 93. Yeah, yeah, maybe a little better.

We've got Miriam in the audience from the NBCA board. I sit on the NBCA board, Miriam.

Oh, 89%. Getting better.

Getting a little better.

But having to pitch a product designed for women to an audience who like this is like the antithesis of what they would want as a product. Something where they could buy dresses all the time. Right. It's like their worst nightmare.

So can I talk to my daughter? Is that probably what you heard that more than once?

So figuring out how to explain that in a way that made sense was a little bit difficult. Ultimately, what we ended up doing was we took a step stack of fashion magazines, right? The September issues, which are like a thousand pages thick, and we took them and we threw them on the conference table in front of the VCs and said, that is hundreds of millions of dollars of ad revenue in just these issues. Now imagine that on the Internet. And then they're like, oh, I get it. So you have to know your audience. That's true with any venture capitalist or like man or woman. But that was part of the hard part of raising. And we also raised 2008 or 9 or something right after the financial crisis. And that was hard.

Oh, that's really hard. Well, and I know you eventually got a good outcome. Maybe you can talk to us a little bit about how that came to you, how you negotiated it and was it viewed as a successful outcome?

Yeah, you know, it's interesting, from a returns perspective, from dollar amount perspective, I would say it was a pretty good outcome.

200 million, right?

I cannot confirm.

I cannot confirm or deny that statement. That's a pretty good number in my book. What do you guys say, ladies? 200 million.

Okay.

All right.

And it was about 22 million. So we've always been very capital efficient, which is something I've noticed more, I think, in female founders.

Yes, the data supports that.

Yeah, the data does support that. But it was a very bittersweet kind of process because, you know, logically that's. That's a good outcome, Right? But when you're pushing yourself so hard and the way. So the myth of Silicon Valley, right, is that you're going to IPO and it's going to be billions of dollars, and that's very rare. Although I would like to highlight, Holly over there has actually, from Kabam, has actually recently exited her unicorn. Like, not Just valuation, unicorn. But Kabam sold for like a billion dollars, so. That' incredible.

Like, stand up, Holly.

Holly is amazing.

Stand up. Don't be shy. Stand up. I'm gonna come get you.

Yeah, you should, you should have her up here next time.

We invested in Kabam, it was actually one of my deals, so I know Kevin, and from way back when, good investment. Yeah, it worked out all right.

Yeah, yeah. But you know the myth, right, of Silicon Valley is that you're going to do this like billion dollar outcome or ipo. So I had this very warped sense of what was expected of me. And I remember as I was going through the entire process, I was extremely depressed, right. And there were outcomes in their ranging. Could have been easily, could have been 80 million versus 200 million, right. So it was a very stressful, very traumatic process because this is something you've, you know, you built over things seven and a half years. It's like your baby. And then I had that point. I had 125 people who, some of whom I'd convinced to leave amazing jobs at Google. And I just felt this sort of sense of like, I'm captain of this ship, I'm the mom of this family. I gotta take care of everyone. They're gonna be so disappointed. And so I remember as I was working on it, you thought they would.

Be disappointed with any outcome.

I just thought that I had promised them the larger outcome and that they'd be real mad. It turns out that many employees don't. You know, you just have to understand that you're the founder, your identity is interwoven with the company. It's different if you're an employee and that there many people are just grateful for the experience too. But I just didn't. Now I have hindsight, I can see how crazy I was at the time. But what ended up happening, happening was Polyvore was growing on mobile, but not growing on desktop. But we monetized much better on desktop. So I was seeing that around the corner as mobile grew and desktop fell, that revenue was not going to continue to go. So I was like, all right, what do we need to do? We either need to reinvent ourselves on mobile, or I need to find a home, a partner that can juice our desktop traffic. Right. And continue to grow revenue. And so as I was thinking about that, two acquirers reached out in the same week. I don't know if either of them was really that serious, but to me I was like, this is a sign.

That's a good day, right? Two acquirers in the same week?

Yeah, no, it was just one. I don't even think was that serious. But to me, it was like, okay, there are more and more signs that I need to do this. Let me leverage that and start a real process and a conversation. I did not hire bankers and I had not done it before. Lucky to have a great board, but it was a very, very stressful, difficult process. If anyone's going through Ma Happ, how.

Many have gone through an M and A?

Oh, man.

Oh, geez. Yeah. Happy 1520.

Yeah, it's just.

It was brutal.

But in the end, we ultimately ended up partnering with Yahoo, which was a great outcome and they were very fantastic to us. The only problem was when we got there, Yahoo went through a particular period of decline. So it was rough, but it was interesting because it also brought our team together inside of Yahoo. But it went through layoffs, some really big hacks, and then the sale to aol. So we got acquired twice, essentially in a year.

All right, very good. You know, I mean, given the success that you've had and a lot of these women have had in the startup world, I wonder why we don't see more of them. I asked this question to the panel in February, and Brit Morin said there just aren't enough women VCs. Is that your view as well, why there weren't more women founders, CEOs? Because clearly the demographics supported. Right? Half of Americans are women. Half of the world's population are women. We buy technology, we influence our families, and we are heavy users of technology. Yet we're not on the design teams, we're not on the product teams, and we're often not founders or CEOs. What's your theory behind that, especially where you sit now in Sequoia?

I think there are a lot of reasons. One of the big ones, I think is actually it starts when you're like three or four and you're figuring out what gender roles are and not seeing enough role models, like the way that I saw my mom, I think shapes young girls and daughters to kind of rule out a set of paths. And just that slight disinclination to go there, like, hurts the ratio continuously over the years, and it just compounds over time. So I think that's part of it. So, you know, all of us here being those role models, I think is what will ultimately shift the ratio. I do think it also, you know, doesn't help that there are very few female VCs. I think that's. That's part of why I decided to, I wanted to move into this role was maybe I could do. Do my part to change the ratio, make the discussions a little bit more diverse at the partnership level, but then also be. Be a little bit like I had role models when I was CEO. Like Marissa was a big one as well as my cfo who I hired was an incredible role model. And just, you know, just it's up to us to win and do well and make it clear that women can be founders, can be leaders for the next generation. So I think that's what's happening. It starts very early.

Yeah, you do have to create in the mind of the young girls that they can be whatever they want to be.

Yeah.

So you mentioned Sequoia. So tell us about that journey. How did you. How did you manage to become the first female partner at famed long history Sequoia? And what in the world is that? Like, I've been there, by the way, and they love. Jess, who was talking when you and I, we met in a one on one. I think it was Doug. Leon. Yeah, it was Doug. And Doug was just. What do you think about this? I'd love to hear your opinion on it. I really want to get your perspective on it. It was really engaged. So you've made an impact.

That is great. Yeah, no, I mean, the whole partnership's really amazing. So what happened was I spoke at a conference in Vegas for Goldman Sachs and a couple of the partners happened to be in the audience.

Well, what were you speaking about? I'm curious.

Polyvore. I was just presenting Polyvore. Almost nobody came to my session actually, because there was a better session going on, but they happened to. And then they reached out afterwards. And then this was in like 20, maybe 2014 or even earlier. That must have been 2010 actually. So that's when I first met them. Then a few years after that, Ruloff, one of the partners, asked me to lunch and I assumed he wanted to invest in polyvar. He's like, no, no, no, no, I do not want to invest in polyvar. He's like, he just kind of. It was like a getting to know you conversation. And then towards the end he was like, have you ever considered going into venture? And I was like, no. In my head I was like, no way.

Why is that?

I don't know.

I just, I was like, I'm an entrepreneur. And I, he. But I didn't say no way. I said, maybe because, you know, you want to keep the door open. And then, you know, I was still CEO of Polyvore at the time, there was no way I could leave that. But he planted the seed. And then after we got to Yahoo, they reached out again and they said, hey, you know, we're sure. We know you're like, not super sure, but, you know, let's have a couple more conversations. And then they said, why don't you come by Sequoia for a day and just hang out and meet some of the partners and sit in on some pitches.

And I was like, free day. Come over and hang out?

Hell yeah. So I went over and I sat down on the pitches and I got into a lot of arguments with some of the partners about why I thought certain investments were great. And I was very, very wrong about that. But I met these amazing people and I thought, oh, this is that feeling of like, really smart people again. And sitting in on these pitches is really amazing. And seeing the passion of these entrepreneurs and maybe if I could leverage all my really painful lessons from polyfort to pay it forward and help the next generation of founders, that would be really amazing. So then at the end of that day, they kind of revealed that it was sort of an interview process. And then we kind of kept going. But I felt at that time I was like, I can't. I just got to Yahoo like 2 months ago. I shouldn't even be here interviewing. So bye. And I peaced out. And then that was when. That was November, right? When I got to Yahoo. November 2015. Fast forward a year. Yahoo had been. Had, announced the acquisition. And I went back and I said, I don't think staying long term is for me. Do you still have that job? And they, luckily they did. I had to re interview, go through, you know, put together, do a lot of work. But, you know, it happened. And I feel so privileged to be there. It's. It's really amazing to learn from some incredibly talented people who've seen amazing companies from all the way from the idea stage to IPO. Like, you know, Sequoia incubated in the office, like YouTube, right? Invested in Airbnb and Stripe, Google, Apple. I mean, it's just, it's. There's an incredible history. But the other interesting thing is this part of Sequoia's core culture is constantly. It's about constantly evolving, right? So being open to changing with the times. And I've been very surprised when I've, as a new person, I've said, hey, maybe have you considered that maybe we should change this? And people are like, yes, if we don't change it, we will. Die. Right. So the spirit of reinvention, I think, is part of what has made Sequoia successful over four decades. Because what tech brand has stuck around for four decades? Right? I mean, very few. So it is constantly about evolving with the times while keeping some of the core tenets true. Like, you have to find daring founders who really want to build legendary companies. And, you know, there's certain ways to run a business that don't change over time. But yeah, great fundamentals as well as openness to change.

That's a great story. Well, what is it like, though, a day in the life there where you're, you know, you're walking down the hallways past, you know, these famed investors who have credentials that would just knock you on your bottom. Do you get intimidated? Is it overwhelming? What's the experience like?

You know, because people have been very receptive to new ideas. It's been a really nice collaboration. Yes. It is intimidating because they're incredibly smart and it just takes a long time to get good investor judgment. Like, I'm not going to claim my judgment is any good. I asked Michael Moritz, how many companies should I invest in my first year? He said, zero. Right.

That is great advice.

Yeah.

Because everything looks good when you're brand new. Everything looks good.

Yes, that was me. I was like, yes, take my money. This is amazing. But I held myself back at the advice of the partnership. But I mean, you would know this better, right? It takes a really long time, a lot of data points of seeing different companies to be able to plot out, like, what, differentiate what's amazing versus good versus okay, so just that patience and that willingness to wait for people, I think they've a big part of the culture. There also is apprenticeships, so taking people who don't really have much experience and working on them, working with them. So shadowing other partners at board meetings, having them in meetings with me, attending their meetings, just like learning and debriefing afterwards gives me each time I learn a little bit more about how to judge an investment. But it is intimidating also because I. I mean, it's very clear, I don't know, anywhere near as much. Maybe on the company building side, having built a company, that's a little bit of an advantage. But like in terms of picking.

Right.

I mean, it's just. It's such a difficult job.

It is. It is a really tough job. What are you focused on? Are you doing consumer, Internet, fashion, all of the above, or do you have a specialization?

I am broadly focused on consumer, but everything from consumer, web and Mobile to consumer, like AR VR to consumer robotics. To me, I feel like my passion lies in understanding what the end user wants. And that end user, and the consumer in particular can be pretty fickle. Like goes from one trend to another. Holly's nodding because she was in gaming and that's the most fickle consumer. But the delight there and the crazy randomness of it is part of what I'm drawn to.

I like that. What at the end of your, or I should say, since you're at the beginning of your career at Sequoia, when you get to the middle point of your career, what will success look like for you? I mean, do you have a vision for what you want to accomplish while you're there? I mean, being a role model certainly is a good start. There are so few women, but is there something specific that you've set out for yourself?

I would love to. So the number one tenant at Sequoia is performance.

Can I get a good deal or.

Two above team and apprenticeship? So, I mean, it would be great to be one of the investors worthy of the Sequoia name in terms of performance and actually picking great companies that go on to change the world and have a really big impact. The other thing I think about is I want to have a long lasting bond with my founders through the ups and downs. Sometimes you may even have to do CEO transitions. That's fine. I've been through many of them myself. But I would want at the end of the day, all those founders to feel like I was there for them and then for all of them to come to my funeral. That's kind of how I think about it. Like how many of you will give my eulogy? So I guess that's another thing I kind of think about. It's a little morbid, but, you know, I like that.

I like the way you think. I think. Okay, so we are going to open up the audience to questions from. From you. So we do have our microphones. Where are our microphones? Oh, there we are. Awesome. So right here in the front, right here.

Hi, I'm Elizabeth Hilton with GE Ventures. And I'm wondering, having experienced the blood, sweat and tears of being an entrepreneur and now sitting on the other side of the table, how has that influenced your investment style, the learning curve as you decide what kind of investment investor you want to be? Yeah, it is pretty different being on the other side. And I can see some of the mistakes I made through new. A new lens now. Right. So when I think about it as a founder, it's Such an opportunity cost. Right. Like, there's so much time. Like, time is the most precious resource. So I think before, if I were a founder, I think I would. A lot of VCs never told me why they were passing. Right. Or never gave me very much feedback or guidance when they knew I was making a mistake. Because they just wanted to have, like, a good relationship. Right. And have be perceived as, like, it was either a waste of their time to tell me or like, not beneficial to them in any way. But it would have saved me a lot of time. Right. And it would be up to me to pick through their useful feedback versus not. But now that I've experienced that. Right. Like, I see the mistakes that I made that I'm sure a trained VC could have spotted immediately. I feel like rather than trying to be nice all the time, it's actually the nicest thing to do would be to help that entrepreneur save a little bit of time. So I think that's one thing that I've kind of changed my mind on since going on to the other side.

Oh. All the entrepreneurs said, amen to that.

But then don't be offended. Right. I do worry maybe people. People are going to get real mad at me. So we'll see how that plays out. I mean, I can't claim that that is.

And that is it. I mean, honestly, as a venture capitalist, you really don't want to go there. It's so much easier just to say thank you, this is not a strategic fit for this reason, or thank you, something other very simple response, because you don't want to get into conversations. And I've done it before, you do it and sometimes you get into this loop and they won't let you go from the conversation. But I think you're right. I think it certainly is very constructive if you can get that feedback and you pitch so many VCs that you think one or two of them would give you some honest feedback on why they didn't invest. But often we don't, unfortunately. Other questions? Yes, here in the front and in the back.

Okay.

Hi, I'm Amy Friel. I'm with Urban Snow first indoor ski park in Silicon Valley coming soon. If you're interested in skiing, come talk to me.

Where is it going to be?

Somewhere in the North, San Jose, Milpitas, Sunnyvale area, tbd. But in the heart of Silicon Valley. No need to go to the mountains.

That's amazing, huh?

So my question for you, Jess, is I noticed that Sequoia seems more active internationally than some of its peers. And I wondered if you can just comment on the philosophy, how that's different from domestic investment, just kind of your take on what's driving that.

Sure. Thank you. So I think Michael Moritz and Doug Leone were early and spotting that China was going to be the next big market and then India after that. So it was more than 10 years ago that they spun up Sequoia India and Sequoia China. And I think their philosophy was, look, let local experts handle it. So the teams are actually run quite separately. Like we get together for global off sites and especially at the most senior levels. There are folks who spend a lot of time together, but largely I don't spend a ton of time with the Sequoia China team. Sometimes they come to visit and I hang out with them. But they're largely run fairly independently, with the idea being that the local expert probably knows the best about the market. And so the types of investments are actually quite different in all the geos.

Other questions, one here and then in the back. Can you give her.

This is a question for both of you. What do you think about technology and it's going beyond the US borders, because, you know, I think traditionally when LPs give VCs money in this country, the VCs have an obligation. They think that, look, let me get an exit, let me get to a certain critical mass before we actually take this company overseas. But now we've got about, I'd say at least a third to 40% of GDP overseas now. And I think the projections are that 85% of the middle class is going to live in emerging markets by 2050. So I've been talking to some companies who are saying, yeah, I do want to have an exit, but I'm probably not going to have one for another two or five years. But I want to be in Europe, I want to be in Latin America. Where do you think the mentality is of Silicon Valley VCs to take these companies overseas? Because there's a lot involved with that and are they prepared? Could this be an Achilles heel? Because there's a big, big opportunity out there and I haven't seen that much of it. They come and they go when the markets are good in emerging markets. But it's really about how do we take the technology that's here and then how do we bring it to markets that are big? China, India, obviously, but there's also a lot of other markets too.

Want me to go?

Yeah.

All right.

So, I mean, I personally prefer that companies going to new markets with customers Bringing them in. The one thing that concerns me with some small companies who are resource constrained, capital constrained, etc. Is that they want to go for the market before they've saturated the local market. And they oftentimes want to do that because they're chasing opportunity and they think there's more opportunity there for some reason. What they don't understand is that there's a lot more cost, there's a lot more overhead, there's regulatory issues, there's local government issues, things that they haven't anticipated. Oftentimes they don't have expertise, they don't have any local presence. So I discourage it until, one, you've done a good job in your local market, and two, you have customers bringing you into those markets. When you have that, then I think you can justify it because they're going to pay for whatever development you're going to do in that market. Your customer is going to pay for that. These small companies can't afford to, so be wise about it.

I feel less equipped to answer your question about the trends and how it's changed over the years. I will say one of the pieces of advice that we give is to think about how operationally intensive your business is. Right. If you compare Airbnb vs Uber, Airbnb has had success in China because it's actually, even though it's a physical space, space that you're renting in someone's house, in terms of managing that, a lot of it can be done centrally versus Uber. Right? You're talking, you're interviewing drivers locally, you're, you're. It's just so much, so much harder. And I think that's very much reflected in Airbnb success in China versus Uber, having to pull back from. From China. So that's definitely like, philosophically, I think doing a few things well is the core of what makes any brand, any business successful. But then when you roll to new markets, that there's. The more complex it is, the longer you probably need to wait and the more people you need on the ground. And, you know, you need a really strong gm.

I care.

I'm CEO of Lookilu. I'm curious to get both of your feedbacks around micro VCS and a trend of micro VCS and how that might impact founding women, for example, in Silicon Valley.

I like the segmentation. Personally, I'm not sure that all Sandhill firms like it because it's really disrupting the traditional Series A institutional money. So there's now pre seed and there's seed and then there's Series A and B. But what I find with the micro VCs is one, they're very entrepreneur friendly. Two, and so they're hands on, they're engaged, they're involved with the development of the company. Two, they don't dilute the entrepreneurs as much. And so there's a whole category of these institutional seed investors that are looking for Series A investors, not like the typical Series A investors that take 20 to 40% of your company. Right. They want smaller dollars in at the Series A and at the Series B round. Right. So they want 2 to 3 million at the Series A A lead, you know, plus insider participation. And they want 4 to 6 million at the Series B. So the entrepreneur retains control. The micro VCs can hold larger percentages of ownership for a longer period of time. And their agenda is not to build unicorns. Right. It appears that the Series A institutional money on Sand Hill Road is all about building unicorns. You guys don't know what unicorns are, right? They're way overfunded. They probably will get liquidity. I mean, Airbnb and Uber are going to determine that in some regard when they go public. They probably will get it, but it may take a long term and there's going to be a lot of dilution for their early money. So I think that's disrupting venture as we know it and definitely further segmentation, the way venture capital has been allocated, I think it's good for the entrepreneurs. I think it's good for venture capital because this kind of capital bloats and these billion dollar funds. I just, I wonder how you make money and I wonder why it's good for the entrepreneur. So I'm a big fan of micro vcs and I'm a big fan of further segmentation like I described.

Yeah, I definitely agree that it's been disruptive. I think for entrepreneurs it's great because there's more and more capital available. Right. However, on one end that's great. But I think there are also folks who are starting funds very cavalierly without realizing that creating a fund is also a really big commitment. You have a commitment to your founders. So if you're raising at the cities, there's plenty of really good micro VCs as well. And but I just, as a founder, I would encourage founders to look really carefully at the quality of the folks that they're partnering with. Like I said, that's like by far the number one most important thing. And then I think one of the other impact, the other things that's Happening because of the flood of capital and the sea stages, because it's easier and easier to raise money. It's attracting a little bit more money. Mercenary type of founder versus a missionary. Right before it was very hard to quit your job and raise a million dollars to start a company. Now that's much easier. So it's good in some respects because hey, the more people who can become entrepreneurs, hopefully the more great ideas will happen. However, I think the data shows that the number of true outlier companies. Right. Has not scaled with the number of companies being started. Right. So it's getting more competitive in that sense. And then it's harder, I think for venture folks to make a good return. So those are some of the upsides and downsides.

Good points.

But if you're thinking about it, it's much easier for you to raise your preceded seed. So go for it.

Yeah, it's true. It is. Please.

Hi, my question is how do venture firms evaluate technology? When there's a huge range of technologies and you don't really have a huge range, or maybe you do, of technical advisors, how do you kind of bridge that gap and truly evaluate what are the other alternative competing ways of solving this problem and is this solution that this company we're evaluating is offering a good one?

So at least at Sequoia, I think we try to have coverage of different diversity of skills around the table. So Mike Vernall is a former VP of engineering at Facebook. Bill Curran was an SVP of engineering at Google. So we've got strong technical talent. I have a CS degree, but nowhere near as strong as them having not worked as an engineer. But we try to have enough people within the partnership to be able to somewhat evaluate that. We also rely on experts. And then there's also a certain amount of competitive research you just have to do. Right. Like you can't justify an investment at Sequoia without having done your homework. And so a lot of work is put into that homework, into understanding the space. There's a process that we use and so far I've found us to be pretty rigorous. Lots of reference checking, a lot of calling into industry experts and relying on the network to find the person who knows E commerce best or knows big data. That's how we do it.

At least that's good. Other questions? Yes, here. The one in the front and one in the back would be next.

So a little different approach. Jessica, I'm curious if you go back to your interview process at Sequoia for those that might have an aspiration of Being eventually in that kind of a role. What were they looking for? What were some of the screening criteria that they looked for in trying to bring aboard somebody like yourself? Yeah, so I was trying to figure that out during the interview process.

Did you ask them after what?

No, because I thought, well, I'm a little bit of an odd choice given that I don't have, like, a strong track record of angel investing or investing at all. Right. And they kind of broke it down into four things. The four phases of being a venture capitalist. I'm curious. I'd love to get your opinion on this, but sourcing, you know, finding great companies, picking, like, choosing the winners, winning the investment compared to other firms all chasing it. And then company building. Right. And I was like, I think you only have data on me about company building. And then I think I was always a good recruiter, so winning maybe, Right. But I don't know much about the rest. And they were like, look, we will teach you picking. You do have an interesting network. Everyone just has to hustle really hard for sourcing. And then the other thing they turned out to be looking for, and I got these weird psychological questions, and it turns out that they were looking for grid because, you know, being a founder takes an enormous amount of grit as well. But being an investor, the weird thing is, like, you might like your job, but you have no idea if you're good at it for 10 years. Right. Like, you just. It takes so long to figure out if a company is going to do well. And fortunes change, Right? So you have to be able. Can you mentally survive not knowing if you're good at your job for a really long time? And it's been described to me as year one. Everything is exciting, exciting. And then years two to four, you're like, my first investments are now, like, the bad ones are starting to die. I have no idea if I'm. Why did I pick this role? And every single partner that I talked to went through their own, like, sort of spiritual, like, did I make good life decisions? And so it's just they were looking for grit and the enough confidence and security as well as a mix of insecurity to make you, like, work really hard. So there were some psychological sort of components that they were looking for. Yeah. That turned out to be what I think they were interviewing.

I think the four criteria are absolutely spot on in terms of what you need. And you're right. You don't know, but you do get signals. And this is the thing. You got to go slow enough in your journey as a venture capitalist to hear the signals that you're hearing from your portfolio companies. Take it slow. Don't try to invest in 10 companies when you start, but listen and learn from what you see your company's evolving to. And then don't repeat the mistakes. I mean, the key is to always be learning and be aggressively learning and adapting your behavior and applying the insights to every future decision that you make. Because you're going to have bombs at the beginning. I mean, unfortunately, you know, in my words of wisdom to Jess was stay in your lane, because the beginning, you really have to know something to make it a manageable journey. Right. If you're brand new to the whole idea of doing venture, she's an expert in consumer. Stay in the consumer lane and just go hard on that, because you can apply what you know there and make up for the what you don't know. And, you know, the investing part and the financial assessment part and all of those other things. But you're gonna fail. And so get comfortable with failure, but learn quickly and fail forward. Right. Don't make the same mistakes with your future investments. If you do that, the pain period will be shorter than it might be if you didn't do it. And you'll get really good at really discerning what the pattern is around picking quality companies. It really is a pattern. I don't think it needs to include gender or ethnicity, because that's part of the pattern, apparently. But. But there is a pattern, for sure, of what makes a good company. Now, I don't know that there is a consistent enough pattern for what makes an amazing company a Google, Airbnb, or any of those that you would consider amazing companies. But there definitely is a pattern that's repeatable for identifying quality companies and so you can live off of quality companies in the venture business. You were going to say something.

I was just going to say the learning point, like, ability to learn quickly was, I think, another important thing. There's a phrase I keep hearing from the partners. It's all about your slope, not your Y intercept, which is a fancy math way of saying it's about how fast you grow. Like what the slope is. You grow like this or like this, not where you start, like if you were started at zero, but like, you know, the person who starts really low but goes like this is going to get somewhere faster than the. The person who started up here but grows like this. Right. So the learning, I think, is a big part of it, too.

Awesome. Okay. Yeah. Question here. And then we're going to take just a couple more because I want to make sure you guys get out of here on time, but here and then a few others.

Thank you so much for all the great advice you're giving us. So as an entrepreneur, if you're looking to get some sort of micro VCs investing in you, what are the first few things that they're looking at? Is it the soundness and the structure of operational efficiency? Is it the kind of contracts that you have? Is it trends, disruptive technologies? What are the first few things that you look at and make a decision that you want to invest in this company?

I think this part may be the part that's consistent across all stages. I would say are you want a founder who has, who's great but also actually understands the customer. Right. Like it's not so much necessarily that you already closed all these customers, especially not at the like seed stage. It's about do you understand the problem that you're solving for and can you crisply explain it? Right. And then you know, is your solution to actually solve that problem. But most people actually just jump into a solution without explaining the problem they're solving is a common mistake. I've seen. And then is that problem a big enough problem to sustain a venture backed company and get you to hundreds of millions of of dollars of revenue and billions of market cap? And then you as a founder, what's the fit? Right. What's the unique insight that you have as a founder into that market or into that customer? And what's the thing that drives you to want to solve this problem? So I think that is something that Sequoia looks at at the seed stage and we do seed investing as well. So come talk to me if you want to talk about seed as well as the A and the B and even our growth team also looks for that.

Yeah.

But then the amount of traction that you need, like, well, that goes up over time, I guess.

Yeah, indeed. All right, one more question right here.

Hi.

Historically a lot of VCs in the Silicon Valley have only invested in Silicon Valley companies or required the companies to relocate. What do you think are the trends? And investing in out of state or even out out of country companies, There are so much good ideas and good businesses all over the world. So what are the trends?

Well, I think the reason that a lot of investors want folks to stay here is because there's so much concentration of engineering talent here, some of the best and the brightest. And then also I really believe that when you are with the best people, it Elevates your game. Right. So bringing founders here and them rubbing shoulders with other really amazing people who are thinking really big just makes them better too. So that's a big reason for it. I think it's getting easier and easier now to feel that same sense of being pushed by others thanks to, you know, social media, like talking to people on Slack, you know, the world's just getting closer. I think one of the trends we're seeing is splitting up the different departments. So Salt Lake City, I was just talking to someone about that. Where did she go? There is becoming a great place for putting salespeople. So Qualtrics is one of the companies we work with. I think they're based there. But when you have a great, you know, you need great salespeople. Salt Lake, Utah happened to be an amazing place for that. So we're seeing like, you know, and if you're doing autonomous vehicles. Right. And anything related to cars, Detroit actually has specialty in that. If you're going to be working on FinTech, New York has a lot of Wall street blood. So I think I'm seeing a little bit more of a trend to, to establish more offices in different places and certainly to split up one company, put headquarters here, and then take advantage of the strength of the different cities in the US as well as globally.

Yeah, I think that centers a excellence. Ideas is real. We, when I was at Intel Capital, we invested across all the states, but in international markets as well. We had presence in India and Central and Eastern Europe, Western Europe, China, Southeast Asia, India. So there are ecosystems and there is infrastructure for investing, for building companies in all of those regions. I mean, it's plenteous. I mean, intel had been in most of those emerging markets since the late 90s. So they're there. You have to know how to find them. But the infrastructure is there to fund great ideas and the talent's there, especially in Southeast Asia, Central, Eastern Europe, China. I mean, the talent is everywhere. So I think if you know who to contact, you can get capital. Capital is not initial these days, which, which is kind of amazing. But anyway, thank you. Wasn't that fabulous? Give Jessie a big hand. Isn't she wonderful? All right, well, hey, we are out of time. I want to make sure you all get enough time to get home, have a drink, have some more food if you'd like before you head out. Don't have too many drinks, but we hope to see you at our next event and it's a pleasure to host you here at my home tonight. Thank you for coming big help. Big thanks to Jess.