Episode #9: The State of Consumer Social with Josh Elman

Hey everybody, I'm Eric Thornberg, co-founder and partner of Village Global, a network-driven venture firm. And this is an episode of Venture Stories, where we deep dive on topics relating to tech and business with some of the world's leading experts. Hey everybody, I'm Eric Thornberg. I'm with my co-host, AB Katz. AB, what's up, man?

It's great to be here.

Today we have our very special guest, Josh Elman. Josh, how are you doing?

Doing great.

Excellent. Josh, thank you for being here. For those who don't know Josh, and I'm sure there are very few, Josh is currently a partner at Greylock Partners. He has been a product manager previously for almost 15 years at places like Zazzle, RealPlayer, and places you haven't heard of like Facebook, LinkedIn, and Twitter. So, Josh, walk us through the process of how you joined Greylock.

So, I joined Greylock a little over 5 years ago. You know, I had known 2 of the leading partners, Reid Hoffman and David Sze, from when I was at LinkedIn back in 2004 and '05. And I'd actually, you know, stayed in touch with them, like I recommend a lot of people do with people who are kind of in VC roles. You know, I'd gotten breakfast or coffee with both David and Reid probably every year, and it was just kind of a catch up on my life. I'd learn what they were into and excited. I'd always go and try to share with them a couple of interesting startups or products or new platforms that I was seeing because I think you always want to share some of them. And so we just managed to stay in touch. Occasionally, folks at Greylock could reach out to me about jobs at some of their portfolio companies. I'd obviously worked at Facebook, which was a portfolio company of Greylock, and I'd interacted with David quite a bit as we were building out the Facebook platform. So I'd gotten to know them over the years and obviously had worked for Reid at LinkedIn. And so I just always really looked up to Greylock as the firm that I thought were people who were product operators, people I really wanted to be a part of. I was working at Twitter, I was asked to resign in July of 2011. Technically, you could say I got fired in July 2011 as part of this whole regime change. Jeff Williams had been asked to leave the fall before that. Jack Dorsey had come back in to run product. And so I'm like, oh man, I'm no longer working at Twitter. What do I want to do? And I was really stuck. I, at that point, had worked at LinkedIn, Facebook, and Twitter, which were all, I think, going to go public in the coming years. I was super excited about what I'd done there, but I'd also figured out, like, maybe there's a reason that I'm no longer at these companies, and maybe I need to take a reset in my life and my career and kind of figure out where I'm going to go. I was 36 at the time, and figure out where I'm going to go kind of for the next wave of my career. I thought maybe some of the stuff that got me to those companies would make me useful to come into venture capital because I found them early. I worked through some really interesting, tough phases at each of those companies. I decided at that point I wanted to go try to get a venture capital job. I figured it was going to be more of a principal type of job where I wasn't going to be an investing partner but might have a chance if I proved myself really well and most likely was going to go back and work after a couple of years. But thought the couple years in venture capital, helping Greylock do good deals, find good deals, and figuring myself out and meeting a lot of great founders, I'd be ready to go and do something else. I got super lucky that Greylock felt the same way, and they decided to bring me on as a principal. That's where I started 5 years ago.

When you joined Greylock, it sounds like your inclination was more, this is most likely a couple-year stint. At what point When did that transition to, you know, hey, I can see myself making a career out of this?

Yeah, well, look, you know, I'll be honest, when I joined, I dreamed of maybe I could become a partner, but I think becoming a partner at a venture capital firm, I mean, you have to be able to go find the best deals and actually win them and convince an amazing founder that they want you to be the person who leads the investment, joins your board. works with them for the next 5 or 10 years to build a company. I just thought it's super competitive. I wasn't sure if I'd be able to compete at the level I'd want to, to be a partner. So I was kind of hedging my bets. I was like, look, if I can become a partner, great, but most likely I'll figure out it's competitive and not sure I'll be a fit and I'll go back to industry. A couple of years in, I just really started to realize that my set of experiences having see in the early days of some of these companies was helping me engage with people going through similar phases in a way that I felt like a lot of other investors weren't able to. I was really building relationships I thought were great, and I was being able to surface interesting companies to Greylock. In fact, there were cases where the people that I was surfacing were as excited to work with me as anybody else at Greylock. or even some other VC firms. And so I thought, huh, maybe I can give this a go. And the Greylock guys said, hey, why don't you stick around and maybe we'll let you lead some investments and see where it goes from there. And at that point I said, you know what, I've got a chance to be part of this partnership with guys I learned from and respect. I'm gonna take that chance and go try to see what I can do.

Being at a firm that has, you know, such big names like David and Reid and some of the other players there, how have you thought about making a name for yourself at Greylock And it seems that you've taken sort of like a blitz approach of, you know, hosting events, being at events, writing a lot of content, knowing everybody. What do you think has had sort of the— been like the highest leverage activity for you to get to where you are right now?

You know, it's a great question. At the end of the day, it's finding really good people and getting to know them one-on-one and convincing them that you want to lead the investment and that they want to be able to work with you. And that's not about brand building and reputation. That's truly just about deep one-on-one relationships and then also being able to leverage relationships from past experiences in previous lives. It turns out with just about every investment I've made, there have been ties that have gone through my whole career, whether it's people I worked with like Evan Biz. I'm an investor in both of their companies. I've worked with them at Twitter, as well as just people who I'd worked with when I was at Facebook or LinkedIn or Zazzle who are very, very close to the founders of these new companies, and they introduced me There's just a sense of credibility and reputation that goes on much more than that. Beyond that, I've also found that I just have been through a lot of experiences in my career and I've really enjoyed giving back and sharing some of what I've learned in hopes that I can help more people not do— at least not make the same mistakes I did as they're learning and going through their journeys and can think about things in new ways. Right. That's gotten me into blogging a lot more and speaking. Again, just trying to share those learnings. I don't try to like pontificate about the future as much as really just doing case studies on like, here's how we approach a problem, here's how we got through it, here's how I'm thinking about this situation for what's coming next.

What would the Josh of 2016 tell the Josh of 2011 as an investor? And I'm curious, you know, AB's a principal at August, you know, somewhat similar situation. I'm curious what you'd tell him. I'm obviously learning as an investor. Thoughts on that?

The number one thing is You have to be able to give value to people that you're interacting with all the time.

Uh-huh.

The value isn't, hey, let me choose whether or not I'm— the meeting, sorry, is not, let me choose whether or not I'm going to invest in you. It's— I really think of it as a job interview where every time I'm meeting somebody, they are interviewing me to see if I am somebody that they would want to be a part of their company, would actually be willing to sell me a part of their company in order to be involved with it full-time. I think when you flip the table like that, and just, you know, when I just tell myself that, you change the way you think of founders. I mean, at the end of the day, founders are doing incredibly hard work to go build a company. We as investors get the privilege to give them— to buy a piece of their company and get the privilege to help them on their journey. I think You can't forget that. The other thing that I would tell myself, or there's 2 other things. One is every decision is super-duper hard and there's no slam dunks. And you have to find those cases. David Z likes to say, you have to find these cases where it's 51/49 and you finally get to the 51% that you want to do it and then you do it. There's never any like, oh man, I'm 100% in. And if it is, then it comes to price and then you're like, do I want to invest at this price? Because there's always something that makes you there. And so, It's okay to go with that uncertainty and find the things that tip you over, not looking for all the reasons something will fail because by default most things won't make it through. Then the last thing is you're not going to win them all. That is a super hard lesson that kills me every time I learn it. You just have to pick the journeys you really want to be on and get on enough great journeys and you'll be in great shape. You can't just always rue the ones that you didn't do. that you didn't win because there will always be more journeys.

You were saying how a lot of investment decisions are very close and there's a big track record of a lot of the best investment decisions being confrontational within a partnership. Have there been any decisions that were the opposite of that, that you had close to 100% conviction?

No. I mean, I think every single decision that I've done has been one of these where I could go either way. at the very last minute and decide to do it or not decide to do it. It's always like, oh, it's too high a price, or it's not there. Probably the one I was most confident in that we've done is Medium and the opportunity to go work with Ev Williams again to kind of build the future of publishing. That was probably the one where I was like, I really would just— I'd worked for Ev. I know how he builds a company and really wanted to go be a part of it. But all of them, but that one, we We paid a premium price to get involved. So there's always some tension for like, is this going to be a good enough investment to return our money? I think that's fine. I think once you're in, you're in and you're committed.

What's the transition from, you know, you working for Ev to now you're on his board? What's sort of that role reversal like?

You know, I don't think of it as role reversal at all. People talk about venture as like the other side of the table, and I think of it as like, as I said, this constant job interview process just to get on the same side of the table with somebody. You know, with Ev, I joined the company that he was running at Twitter to help him achieve his massive vision. With Medium, I joined the company that he's running to— invested a bunch of money in his company to help him achieve his massive vision. So I don't see it as that different. I'm still in a support role. I just now help at more, more of the strategic levels rather than— doing day-to-day work.

Let's talk about winning deals. Reid likes to say, you know, venture is, at least at seed, it's, it's seeing deals, it's picking deals, and it's winning deals. You've won a lot of competitive deals. Let's talk about deals that you haven't won. One of the things, you know, this is sort of a rumor, so I don't know to what extent it's true. But one of the things I've heard is that you discovered Snapchat early before you were a partner, and then there was some tension around going for it right away. Can you talk about a little bit the process of, in your mind, could you have done to To win that deal, or just maybe you could pick a different company, like what happens when you don't win and how do you think about winning deals when you're going head-to-head against Sequoia or Benchmark or some of these other also top-notch firms?

Yeah, look, it's a great question. Snapchat is certainly one that got away from me and that I was super excited about early and got to know the team and got really close to the team for at least a short period of time where I just thought, could have, you know, they were at a stage that was very similar to stages I'd been at with other companies and thought it would have been really a lot of fun to help them through it. And I think we connected, but, you know, you can't always win every deal. And it's that combination of like, you see it, you get your entire partnership to believe in it, you make sure that the founding team knows that your entire partnership is ready to commit a lot of money and commit a lot of resources. There's all kinds of dynamics. that come into play, and everybody is wooing a founder at this time. Everybody's kind of like, you know, putting their best foot forward. It's like everybody's trying to like woo that one.

And what's your sell? What's your sell when you're going head-to-head against Sequoia? Like, what's your sell? Like, what do you tell the YC founders or another group of founders? Like, what do you tell them? Don't take Sequoia's money, take my money. What do you say?

Look, I never try to say like, don't do this or not. I say, look, there's a lot of great options that you can pick. Here's the reasons why I think we can uniquely help you. Here are the people that we've worked with. Here's how we support people through all the ups and downs. Here's how we can really be a product and an iterative brainstorming partner for you in ways that I think most other people haven't because they haven't been through the throes of how do you build organic distribution, organic network effects through your products with guys like Reid and I have just done multiple times in our careers and really seen it at that super intrinsic early product level. That's really what we say is, look, if you want a partner who You can call at all hours and brainstorm through things like that, you know, and work through it. You know, I think we can do that better than anybody else. You know, and then in terms of us being able to help you recruit, bring in the right executives, we have an incredible team that does that, connect you with all the right people at all the right companies. We obviously can reach pretty much anybody. Those things though, I feel like are a little bit more table stakes.

Right.

And it's really the— you and I want to work together to go build this together, and I'm game. I'm really excited too.

And when you're going through processes like that, you know, to what extent do you think it's the individual partner and to what extent do you think it's the firm and the reputation and resources of the firm outside of the individual?

Look, I think it's— the majority of it ends up being the individual partner because that's the person who's actually joining the board, who's in the boardroom, who's doing the Right, right. You know, 7 AM texting, the 11 PM calls. And so it really is that. I think the firm and knowing that that partner has the full support of the firm and you'll have access to all the other resources the firm provides is important too. And I think if you don't get— if you like meet a partner and spend a lot of time with a partner and then you're like, I don't even know if the firm has this guy's back or this woman's back, I don't know if they're gonna actually really support me, or they're just letting this person kind of do it on a limb, then you feel a lot more nervous. But as long as you feel like you have the full firm support, it really comes down to the individual partner.

Right. Let's talk about when you're investing. Walk us through Meerkat. I mean, Meerkat to Houseparty is one of the most inspiring stories of the last year. You invested right on that South by Southwest wave. I remember being there. Did you see the pivot coming? How have you and Ben worked on the Houseparty evolution? Just walk us through that story.

It's a great question. Look, I've been excited about live video for my entire career. My first job was at RealPlayer Networks doing RealPlayer, which was live audio and video on the internet. I was a fairly active advisor to Ustream in the late 2000s when they were pioneering a lot of web streaming video.

I remember you got a check in the mail like 10 years later, right?

Yeah, and so mobile— when mobile live video started happening, I started sensing it Yeah. 2014, was like waiting for something to pop. I actually met Ben when he was building a product called Yavo. Every time Ben would come over from Israel, we'd hang out and have a good conversation about live video. I wouldn't be ready to invest in Yavo, but I certainly liked Ben, and I loved his vision. He then started pivoting to a product called Air and Meerkat. I played with Air, and again, wasn't sure it was going to break out, but loved Ben and just loved the way he talked about where live video needed to go. He named his company Life on Air, by the way, which is pretty apropos that it wasn't a specific product. When Meerkat popped, I knew Twitter had bought Periscope, but I believed that 2015 was going to be the year of mobile live one-to-many video, and just said, man, I really want to get involved, and told Ben, look, I'll do the deal.

You won that deal. That was a competitive deal.

We actually signed the term sheet before South by Southwest. I don't know what other firms— he might have talked to one or two other firms too, but I got my partnership all fired up and we got it done even before South by. We went to South by and it was great. Then I knew Periscope was coming. Twitter then cut off Meerkat. Then Facebook comes out. At the same time, Ben was seeing this trend where 2 things were really happening at Meerkat. One is when somebody went on with a bunch of their friends, we thought the experience was pretty magical. You'd be hanging out with people that you know. It was kind of like a live party room. You were actually having this live moment together that we weren't really having online in other ways. Most of what we're doing is sharing a picture and looking at each other's pictures later. Meerkat was having those live moments. The second thing was he was like, but nobody keeps going on to Meerkat. People aren't broadcasting consistently. They go on, they have these moments, they get spooked by a random audience. Celebrities aren't doing it that often. We haven't found this repeat. habit, and Ben talks a lot about habit. And so when Facebook came out with their own live video, even a lot of the celebrities and influencers who were actively using Meerkat started migrating to Facebook, and we went down from there, and we're like, look, we could compete against Twitter, but I don't think we can compete against Twitter and Facebook. I want to do something radically different. I have this idea for House— for this product that I think he used the name Houseparty even right at the very beginning. that creates this group chat experience that's live with your friends. It's always on, pings people to tell them that you're available to hang out, you're in the room basically. He kind of had this vision and what we said was, look, Ben, there's a lot more you could still do with Meerkat. We could add money to the payments and processing, which you've seen in the Chinese players. We can find new communities who will do it. But if you really believe in this, go prototype it. We as a board really supported Ben to export and prototype it, I think at a time when a lot of investors might have been clamoring to ask for their money back. That was never a consideration. This was Ben who'd started the company Life on Air. Meerkat was already a pivot, and the idea that he had a new notion from the kernels of what we really learned from Meerkat were great. We started building it, and we kind of every quarter gave him some milestones. Prove that you can kind of build a prototype that works. Prove that you can get it into some people's hands. Prove that we can really make it valuable to people where they keep using it. Prove that we can start to get distribution. Then in May, it busted out and started blowing up and hit number 2 in the App Store and then fell over and just wasn't able to scale at all. So we said, prove that we can build something that can actually scale. Spent all summer, a couple of Friends of mine who I'd worked with at Twitter came and joined the company to help us kind of fix a bunch of the issues. And boom, by the fall we had it scaled, and a lot of the stuff Ben had proved over the year all came together and have, you know, what is just, you know, right now is a pretty incredible phenomenon. But it's been a year-long journey of constantly hitting these milestones in order to do it, which I think has been— it's been great.

Going back to when you first met Ben before Meerkat even launched. What was it about him that made him someone that you wanted to spend time with?

I really get enchanted by great founders who have a vision of the future 5, 7 years ahead and can talk about why the ingredients are right now that we're gonna be able to build this company that will achieve this amazing thing 5 or 7 years from now.

You think Reid is sort of like that too, right?

Oh, Reid, Reid was the epitome of this. Like, when I met him in 2003 at LinkedIn, He said, here's how we're going to build a social network for professionals. It's going to solve jobs and sales and recruiting and hiring and the way you're going to get expertise and learn as a professional.

Did you see social too then in 2003, 2004? Did you also predict the wave of social?

I certainly believed in it. A buddy of mine— I was at business school for one semester— wrote a point-counterpoint about social networking. We both really believed that like this formation of users' identities online was going to change how we navigated our communities and our networks radically. And that's what prompted me to go even apply to LinkedIn and end up dropping out of business school when I got an opportunity to join LinkedIn. So, so believed it back then. But, but back to Amy's question, have always believed in those people who paint that picture and being a visionary is one thing, but then they tie it to real pragmatism. They tie it to why now we can build this one thing that gets us one step towards that journey. If we build this, then we'll get to build this, and then we'll get to build this. Somebody who's able to break down this vision into very discrete steps, and where I buy the steps, and I buy that you can measure yourself by whether you've accomplished each one of those steps, is the combination that gets me every time.

13 years later from when you're in business school, and you predict social, and you ride the wave of Facebook, LinkedIn, Twitter. Now you're an investor and you do a lot of consumer social. Where is the white space in consumer social and what do you sort of understand or predict that other people don't necessarily understand?

That's a great question. Look, I'm not sure there's as much white space as there was 13 years ago. We have a $350 billion company or whatever in Facebook that is touching a billion people every day, much more when you include Instagram and WhatsApp. in there about how we connect with the people around us, let alone Twitter and Snapchat and everything else. It's definitely not as in LinkedIn and its professional network, so it's not as much white space. I think now you basically look at the world today and say, what's missing? What do we still want, or what do we want more of? This is part of what's led me to Live, is this realization that we've done such a good job creating a way for me to share and capture any moment and broadcast it out to other people that they interact with later, I'm not sure we're actually connecting as deeply as we think we are. When I am sitting on my couch looking at you at a nightclub, that's sort of a weird gap where I'm like, oh, I'm kind of bored, man. Eric's having a lot of fun.

We live in a weird place. No, but there's a benefit of being in person that the internet hasn't fully captured and live is part of that. What does that look like years down the road? Things like Skype have been around. Things like Houseparty are adding presence. Do you think it'll be even more like being in person, or how does that—

How does that affect what you want to invest in?

I've been looking a lot at what are these spaces that bring us together that we actually can interact in these live ways. That's part of what got me really excited about Discord and how it becomes this connective tissue for when we're playing these live MMO games. Discord becomes the communication channel that we all go spend time in together while we're playing these great games. Or what led me to Meerkat, now Houseparty, around how we actually do this live connecting. I think that that's going to create all kinds of new opportunities where we're going to have choices of whether we go out in the real world or we like jack into, whether it's virtual reality or just our phones, to have these much more live connections. Things like Skype and the telephone have been around for a long time, but that's like a call. That's not hanging out. That's not creating presence. It's become to feel more like a burden than a joy to connect over Skype. Look at us, we had to schedule a call—

Right.

In order to do this. And that's not how we really want to live our lives, in a little bit more of a fluid way. I also think there's going to be a lot more things in social that are going to push us back out into the real world. I looked at what Pokémon Go did last summer to get people out in the real world walking around, interacting with each other, doing things. And I think that was the game, but I think there was a lot intrinsic in that behavior that can become a much richer platform to actually have us out in the world together doing things, you know, going out on a Friday night instead of sitting at home, even though we do have these live moments and live things we can do together.

Let's talk about how you look to When you look to invest, what sort of metrics or what sort of signs or things do you need to be— I know a lot of people send you a lot of things. When is something really exciting for you from an investment? What do you most care about?

When we really lead a venture investment and I'm ready to join the board, we're writing $5, $10, maybe sometimes $20 million, we're looking for something that I say, it's working in pockets. And it doesn't need to be working at scale, but where you go to some community where you have people who are very deeply using the product on a very, very frequent basis. And there's like, I like to call it like a cluster of people who are actually doing it together. And then the real investment bet is if you can figure out how to get some clusters on, we can figure out how to get a lot more clusters of people onto the product. And so when I make investments in that mode, and Discord was certainly there with its community gaming, Musical.ly was there with the people who were creating and sharing the music videos, Houseparty is certainly there right now, where I really see like these people are already using the product in a really meaningful way. Sometimes we'll also just make a big bet on a space where we think somebody can go figure that out, like when we bet on Jelly or Operator. behind a founder who we know well. But I think, you know, in general, the best time for me is when I'm meeting somebody who really just says, hey, look, I think I've got it working in a couple pockets. I really wanna get this to 10x, 20x, 100x scale. How do we go do that?

And when you say working in pockets, are there specific metrics that stand out for you, or is it really case by case?

You know, it's generally case by case. What I really— what I like to look for is retained and sticky users. So how many people who started using the product are still using it multiple times a week 3 weeks later? And by the way, I don't care if every other user who tried the product isn't using it at all. If you're retaining chunks of people who are still using it, you know, the product religiously 3 weeks later, 4 weeks later, You know, 2 months later, like, then you have something.

There's been a subset of apps that have had pretty strong engagement with, you know, certain audiences but haven't found a way to go really broad, especially the anonymous category comes to mind. Do you think that changes with the anonymous category? And do you think there's other things that— when it appeals to a pocket, how do you think about, you know, does this appeal to, you know, 100 million plus people? pipe audience that you might need to build a really big consumer business?

Yeah, that's a great question. Like, I think, I think the other factor that I like to think about a lot with any product is how do people extend their relationship with it over time? How does it become even more important in their lives the more that they use it? You know, something like Dropbox is just a great example. You throw some files in, then you throw more, then you throw more, and now all of a sudden your life's on Dropbox or like Evernote. I'm just using those as a good canonical example. Social networks are the same way. The more friends you add, the more you communicate there, the more it just becomes this place that's imbued with all this feeling and emotion, and this is where you talk. Why do I need somewhere else to post it? Because I can just post something on Facebook and all my friends will see it. We like to think about how does a product grow over time. One of the challenges I had with the anonymous space, and I looked hard and really excitedly a lot of the companies that were getting real traction a couple of years ago in anonymity and never could quite get my head around how these products grow with us over time. That was sort of one of those things that I think I missed in that category that I have seen in other ones.

Do you think someone's going to make it work in the anonymous category?

I don't know. I worry structurally that with anonymity, What happens is you join it today, you have a bunch of really amazing experiences, a lot of information comes to light that wasn't otherwise. Some awful gossip and slander against people, but even ignoring that, I think there's some real value that comes from these anonymous systems. I think the problem is 3 weeks later, 3 months later, you go back to the product and it's like starting fresh every day. It's like Groundhog Day.

Right.

ends up becoming the same recycled jokes or the same recycled content and not having this renewed sense of commitment and growing together with the platform. I feel like I don't know how they structurally get past that, even though whenever these things do come out, they light up and a lot of people interact with them in interesting ways quickly.

Right. It is interesting. The question people have about Yik Yak is, did they just make a mistake or is it a structural problem? If the product was structured differently, like, you know, maybe— and I'm talking like, could there be an enterprise version of a Seat Creator? Or like, what's something that could work there?

Yeah, I just worry that, you know, as human beings, like, you know, we build relationships over time, and every interaction we have kind of extends our relationship. And so it compounds, and we love this connective tissue of our relationships back to our past. That's part of what makes us humans. We like meeting new people too. But when you think of social networks, what's powerful is they extend those relationships. When you think of anonymous systems, they don't. And so I worry that they're all fun for a while. You know, Balaji— More like a game than a system of record.

I wonder, like, Balaji had this tweetstorm a few months ago where he talked about like unbundling identity and basically us having like multiple names. And I wonder, I wonder if there is sort of a pseudo-anonymity that people— there is some accountability, But also freedom to say things that you wouldn't say under your normal name.

I think there is something important there that still is not tapped in social, which is how do you find these other important communities that you're passionate about and letting you really connect with them and be with them on a frequent basis. It doesn't matter whether or not it's your real name or not. I'm a huge Seattle Seahawks fan, and I just feel like I never quite have the space where I can just let loose and talk about Russell Wilson and the Seahawks defense and just go off with people who will totally share that with me. It's awesome when I get that experience. That's a part of the thing that I love to emote about that I just can't— haven't found and had a community that makes that really easy to find and interact with online.

We both invested in Islands, Greg Isenberg's company. I think that's where you think it could potentially happen? What does he need to do to make that work?

This is why I love our Discovery Fund, where we can occasionally put in $50K checks into companies like Greg's that are super early, but when I meet the founder, I'm captivated by the vision, even if I don't yet see the traction momentum. Greg certainly is one of those trying to figure out, how do I build these safe spaces for you to hang out with people of like mind and interact with about that topic? When you want to talk about a different topic, You go to a different space as opposed to my same friends all the time, and they're like, shut up about the Seahawks, Josh.

Good old Twitter. With Discovery Fund, you know, the main fund's a billion-plus fund. What are the goals of doing these $50K checks, and how do you manage it from a time perspective? What's that trade-off?

It's a great question. So, look, our overall fund is a billion-dollar fund. Discovery Fund is sort of a little carved-out portion of that. The idea really is, is a lot of us would be angel investors on the side if we weren't venture capitalists. And so there's a real joy in being involved in something early and getting to help founders even at that stage, even though that's not the best way for us to return capital to our LPs, which is by writing these much larger checks. And so we found that Discovery Fund is a way where we can You know, commit to somebody that, hey, we're involved. And I think of it more like pull than push. Like, I encourage the founders who we invest in to reach out to me whenever they need to talk about an issue or a problem or want feedback on something, and I'm there to give it, whether it's a phone call or a quick meeting, an update, or a long email exchange around a deck or a new feature to go check out. You know, I try to do that all the time. Now, I would do that for early-stage founders Anyway, that I like and am getting to know. But I find that when we invest a little bit, it kind of changes the conversation where they're like, ah, should I call that Josh guy? He seemed like a nice VC, to like, damn it, that guy's on my cap table. He better respond. So I just love it. You can ask the people that we've invested Discovery Fund in. I try to do as much as I can for them. I'm not on the phone with them every day talking about every issue. I probably talk to each of my main portfolio CEOs, almost every one of them, every week, and it floats in and out, whether that's an in-person board meeting or a phone call or just a one-on-one meeting or a set of text messages. Whereas with the Discovery Fund companies, it's a little bit lighter, but I try to be there whenever they ask, and occasionally I'll nudge if I haven't heard for a while.

Can you talk about any other Discovery investments you've made and just in general your thought process? You're taking moonshot bets with the discovery, or is it thematic? Is it founder-based, or is it the same? How do you think about it?

I like to think about it as, hey, if I met this founder or saw this founder and they came to me with something that was working in the way that I think this idea can be working, would I want to lead the Series A or Series B? And if the answer to that is yes, and I have some— like, and there's a strong lead coming into the round, And I have— generally have some other relationship or connectivity to the founder, either directly or through people who know us both really well, you know, we'll sometimes do it. I do it pretty rarely, like at most one every month or two, like, you know, so like 5 or 6 a year, but it's not that frequent. But it really comes down to the, like, would I lead a Series A if I saw this exact same pitch with a great set of retained users in pockets? that I believe was about to really break out.

When those companies then come up for Series A, hopefully they're in a position where you want to lead it, but, you know, should they not have sufficient traction or whatever other reason, you don't do that many deals, do you think that signaling risk is a real thing? And how do you recommend your Discovery Fund companies to sort of handle that?

You know, look, I think too, I think there's always a set of— whenever you're going out to raise, there's going to be people who are excited and people who aren't. And it doesn't matter whether or not they're investors before. And hopefully you've been building relationships with lots of people independent of whether or not they've actually invested. Part of the reason we do such a small investment of $50K is we don't own a meaningful piece of the company.

Right.

so that nobody is like, hey, they own 10%.

Right.

Original seed rounds, like, we're owning like 10% of a company. If you own 10% of a company and then you're like, oh, that's it, I'm not going to invest more in the company, like, you're kind of leaving the company high and dry. When you've only invested $50K, people don't kind of assume that you're just a given commitment, you know, if not. That's sort of in general how I have— how I felt about it. You know, I've seen plenty of companies we've given some seed money to Raise money from other great people. I've seen plenty struggle to raise, totally independent of the fact that we're not the partner to lead the next round. So I don't think that the signal has been, oh man, well, if Greylock doesn't want to do it, then I don't want to do it.

You know, you've been doing this for 5 years, you've hit some great deals. What's a deal that you, that you totally missed, that you didn't see coming, that you could have gone after, was in your inbox, but just didn't see it working or taking off, and then it just did?

Man, that's a great question. You know, a recent deal that got done, Peter Thiel announced an investment in a company called Zenly. And Peter's one of the best investors and just somebody who I just deeply admire his instincts. He was obviously an early investor in Twitter and just, you know, had incredible foresight for what Twitter would become. And when he invested in Zenly, you know, I just looked at myself and I was like, I wonder how we missed that and like what his instincts are firing that mine totally weren't, because it's super impressive. What the idea of Zenly is kind of the next-gen Find My Friends, really bringing people together again in this tighter way, understanding who you're connecting with and who you care about and where they are and where you can go out and be together. Back to like, we're talking about being together in the real world. And so I really kind of regretted not having pursued that one more actively. It happens to be in France, and I think a lot of the user base is in Europe right now. But that was just something that I think struck me as one that I really regret not having dug into more deeply. And I definitely respect Peter's instincts.

You just have to spend more time in Paris like Peter's done and it may end up paying off.

That doesn't sound like a bad thing.

But you look at these people like Peter Fenton, like Jim Goetz. Right now, I think you are the go-to consumer store, like the most up-and-coming, the hardest working. You're it right now. But these people who've been successful for decades, When you think of them, what do you need to do to be as good as them, or even like David Zee, in terms of consumer investors? Where do you need to grow as an investor to be the greats, like one of the greats, in your opinion?

It's amazing how successful a lot of these guys you just mentioned are. Peter, Bill Gurley, David Zee, Reid, Jim Goetz, Mike Moritz, obviously, at Sequoia. And I think as you grow, I think the things that I really need to go keep learning and studying are like, how do you keep growing and helping scale a company? How do you get better at helping companies early find the right key 3 to 5 people who will really help gel and make a great team for a company? You know, at Houseparty, we helped place a woman named Seema Sistani, who's now the COO at Houseparty. She had been at Tumblr before, and she was doing a lot of partnerships. She came over to help with Meerkat and with partnerships. Her meshing with Ben has just made an incredible team where they together really helped for Houseparty. I think I really want to get better at how do I help those founders see around corners, figure out when they need to hire the right person or do something crazy and strategic. I think you only gain that with experience and being around company journeys. Hopefully some that turn out really successful, and you learn enough from those patterns of those kind of multi-step— when do you need to hire somebody, when do you need to upgrade a certain role, when do you need to throw out a partnership that actually isn't working— that I still need to learn and be able to be a better advisor to my founders for. I think right now I'm still really helpful when we get into deep product and distribution details, but I still have a lot to learn. learn and be able to add even more value in these other things. I think guys who've been around for a long time, they've really gained that experience and they're really good at it.

You have a set of companies where you did a Series A or B investment and gotten a lot of great momentum, but there's still a variety of outcomes out there. Does the way you engage and help a company change as they start to enter a growth phase? And what's that been like?

Every stage of a company is kind of a different journey, and you go through, like, okay, what people do we need to get through this stage? And at Discord right now, we're kind of going through the, like, okay, wait, it's been a year and a half that the company's been in existence, product's been in existence. We have a lot of people using it. How do we stake our reputation to make sure that we're an even more integral part of the overall ecosystem? And what do you need to do to kind of level up from not just building your product, but also thinking about relationships with the other companies in the ecosystem so we can be a good partner to everybody? How do you start looking at the next level of strategic concerns? Amazon bought a competitor of Discord's called Curse Mobile that all of a sudden makes you say, wait, is Amazon and Twitch a friend or foe in the ecosystem? How do you actually deal with those concerns? That's sort of that next level. Then what kind of team do you need to deal with that? How do you now put in second and third level managers in place? How do you hire the right executive who can actually build an entire organization to run this? And, you know, one of the things we do is we encourage our founders to go meet founders who've been through those journeys before. And I think, you know, me as a board member, I'm learning and talking to a lot of people who've been through those journeys before, including lucky enough to have my partners like Reed and David and John Lilly, etc., who've been through them as well. So that we can all kind of learn together, you know, as we keep building the company. On the other hand, like, you can learn as much as you want. Every company is a little bit of a unique story and a unique snowflake. So you can't just like do what they did. You have to keep applying all those learnings to your current situation, the current market, and then figuring out how to navigate it, you know, which I really enjoy doing as well.

Zooming out a little bit, how does, you know, someone at Greylock or partner at a top firm narrow in on a focus? You know, you mentioned that there might not be as much white space in consumer social. How do you think about other things you might wanna invest in? And, you know, also asking in the context of, you know, Sarah Tavel, you know, recently joined Greylock and had this piece about saving time, saving money. I'm curious how people sort of narrow in on investment themes and how strict do they have to stick to it?

When people talk about me as consumer social, what I really like to think about myself is like, what are products that we spend a meaningful amount of our time and life with on a very frequent basis? I really like to be in the business of building products that people actually use and engage with consistently. This doesn't just mean it's something that, hey, there's a lot of other people here I can communicate with. I invested in Operator in this idea that we were going to have a shopping assistant that was going to be able to help you every day shop better, find things you were looking for, and you're going to be able to engage with it over messaging. I invested in Jelly, not because I thought Jelly was a social network. I thought Jelly was a simple search engine to solve— you could ask questions and get real answers to. I'm really looking for those either, like these communication type products like social or these habitual products that you'll use very, very frequently because I love being part of building habits. I can see it spanning way beyond just what we call social media or communications. Into health and fitness and wellness and ways that we improve ourselves every day or into banking and finance or into lots of other areas of our life search and finding the right places to go or people to be with. They all tie back to these very frequent habits. That's kind of where I think about and I think about what we aren't solving in our lives that we can solve much better through technology, through platforms, through systems. And then the second thing is I started getting excited about hardware and the smart home and the Internet of Things. I invested in a company called SmartThings, actually, as my very first investment. And I believe that everything mechanical is gonna become electronic in the next 5 or 10 years, starting with your thermostat and your lock and your cameras in your home. And the amount of things we're gonna build on that are pretty phenomenal. And so I'm excited about where that's going as well.

Now, when you make an investment in a space that sort of locks you into That space, right? You can't make more investments in that space. How do you think about that in the context of what else could be out there when you're making investment or that hasn't been invented yet?

At the end of the day, I don't think anything locks you out from anything else. We want to find the best investment returns for our limited partners. But when we commit to a founder in a journey, we really want to be on their journey and figure out everything we can do to make them ultimately the most successful. You know, it doesn't make sense to invest in like 3 competing live video products because we can't be as committed to helping one of them be successful as trying to be in 3. And there's so many opportunities out there that even if you are on a journey and you see something else, you're like, oh, I wonder if that one might work better. There's so many other good opportunities in there. You don't need to be distracting yourself to like be in kind of this competitive space.

Right.

Because when I go meet a candidate, I'm not like, hey, so you want to do live video? Here's my 4 companies, which would you like? I want to be able to sell you on the one that I bet on, that I really believe in the vision. Greylock invested in LinkedIn and Facebook, and everybody was like, how can you invest in social networking in 2 different companies? And they're like, LinkedIn and Facebook are different. They're both going to be great businesses. Everybody believes that who's involved with the companies, including me as the investor. So like, why are you asking that question?

Reid invested in Facebook.

So yeah.

Reid invested in Facebook. So people overreach. And by the way, look, right now Facebook and Amazon and Apple and Google. I mean, they're all sort of competing with each other, and they're all different too. So at some stage, everybody competes with each other, but it's really hard to say that at the beginning.

Have you dealt with any issues around that at all with multiple companies doing overlapping things yet?

People had some question even when we invested in Jelly and Oslo, an operator. We were investing in 3 different things around this idea of conversational commerce. We all felt like they were all very different. But some people thought maybe there's some overlap. I'm excited with the direction that each one of those has taken, although it's been a trickier challenge in conversational commerce in the bots world to find any true deep products taking off yet.

Why is that? What needs to pop for that to happen?

I think it's a behavior shift, and I think we're earlier than I thought to be ready to be talking to something on the other side. That we just like, oh, this totally gets me and I'm ready to go text for all my business needs rather than, hey, I can just get on my computer and search around for shopping or to find something. I mean, even with Jelly, people are like, well, I can just Google for that. And we're like, no, but don't you understand? You spend 10 minutes Googling and looking at links on your phone and trying to find your damn answer. On Jelly, you ask a question, you put your phone away, 10 minutes later you get an answer from somebody who knew the answer. That's a much better experience. People are still in the like, oh, but if I spend all the time Googling myself, it's much better. You know, I just think it's gonna be a slower— it's a slower behavior change than I thought we might be ready for.

Zooming out, maybe we'll close with this question. In August, you had this tweetstorm about how you spent too much time in your product management career worrying what your job was instead of focusing on what problems you were solving. And that if you go back, you'd tell a younger Josh to be more just patient and focus on the work. If you listened to that advice, what would have been different?

Well, number one, I probably wouldn't have left LinkedIn or even Facebook, assuming I'd gotten into Facebook. I spent a lot of time early in my career— I got promoted pretty quickly at RealNetworks and was running kind of a big team, and I was maybe 5 years out of school and on a flagship product and thought, man, I should just be the guy running the show. This is great, and was just sort of overeager. Then the rest of my career, I'd go into a new job and I would do a bunch of great work in the first 6 or 9 months. Then I'd kind of go to my boss and I'd be like, hey, so can I get promoted yet? I wouldn't quite ask it in those words, but I definitely would sort of imply that and imply that I wanted it and was going to be unhappy if I didn't get it. Then I would kind of get unhappy in my own head. I'd still do work that I'm really, really proud of, but I would also be like, why am I not getting more responsibility? And that would get in my way. Honestly, people around the company don't want to work with you as much when you're like, why am I not getting more responsibility? They're like, just do your freaking job and do it really well.

Right.

So I got sort of a mixed reputation of being somebody who did work where I felt like I worked really hard and I'm very proud of what I did, but also was somebody who was pushing for responsibility sort of ahead of it being fully earned or Being ready to grant it. And so people were like, well, I don't necessarily want to work for this guy if he wants to be my boss. And it created a weird dynamic. And I screwed this up multiple times. And I spent way more time in my career going, why am I not the guy? Instead of just, what do I need to do next? What do I need to do next? And everybody who I've seen achieve amazing results and have massive responsibility at Google, at Facebook, at these companies I deeply respect, didn't do that. They actually did great work and they kept doing great work and people wanted to work with them, wanted to get their input on things. And over time, the leadership sort of said, whoa, we need you to take on more responsibility because you're already doing it and you've already earned it in the company. And I always sort of asked for it ahead of fully earning it and screwed myself up. I'm still proud of all the work I did and I managed to find other great jobs, and I managed to, you know, land here at Greylock. I think I could have done even better and gone even farther if I hadn't screwed some of that up.

And what's the equivalent of that in VC? When you see young people who are trying to become partners, like, really early, or what's the equivalent? Like, what type of great work do they need to do?

The negative equivalent of this is somebody who comes into a firm and they're like, can I lead this deal? Can I lead this deal? Can I lead this deal? And always talking about deals that they lead rather than helping the partnership that they're at do great deals. The way you help a partnership do great deals is you find interesting companies, you encourage and push the partners to do those investments, you make very clear thesis on why you think some things will work, others won't. You build great relationships with founders who, when the partnership is doing the deal, the founder says, hey, I'm really excited to work with you, Mr. or Ms. Partner, but I also would love to have this person involved because I built a great relationship with him. And so you sort of earn the invitation to be involved, but you don't try to like, I need to do the deal, because your job is to help the partnership do the deal when you're sort of early in your career. Or if, you know, and that's sort of how you continue to earn that respect. Cool.

Josh, thank you so much. You've been a, you know, huge friend and a huge mentor. Appreciate you a ton. Thank you for spending the time with us today for this conversation.

Guys, I'm always happy to do it, and thanks for a great set of questions.

Awesome.

Awesome.